Pound Slips Below 1.33 as UK Jobs Data, Dollar Demand Weigh

Renewed dollar demand is the other force. Middle East tensions have kept crude oil and global bond yields elevated, pulling capital toward the dollar as a safe haven. The pound's yield advantage has narrowed as US Treasury yields rose faster than gilt yields over the past week.

Political signals from the new UK government also factor in. The administration's first budget announcement, expected in September, will be read for fiscal discipline. Markets are watching the fiscal rule framework, one trader said, not the headline spending numbers.

Sterling's path this week rests on whether the data confirms the BOE's hold bias or opens the door to an earlier cut. The UK employment report is due Tuesday; CPI follows Wednesday.