Pound Sterling treads water amid strong US Dollar and higher US yields.

A holiday in Europe keeps the financial markets closed. Across the Atlantic, data from the Institute for Supply Management (ISM) revealed that business activity in the US expanded in March for the first time since September 2022, suggesting the economy's resilience. The Manufacturing Purchasing Managers' Index (PMI) reached 50.3, surpassing the consensus of 48.4 and improving upon February's 47.8. Furthermore, the report highlighted an increase in the Prices Paid Index, which was its highest point since August 2022. Given the economy's better-than-expected performance, this resurgence in pricing pressures might hinder the Federal Reserve's inclination to soften its monetary policy.

Earlier, S&P Global announced a slight adjustment to March’s Manufacturing PMI for the United States, finalizing it at 51.9 compared to the initial reading of 52.2, around 13:45 GMT.

Following the data, money market traders slashed the odds for a Federal Reserve’s rate cut in June from around 60% to 56.9%, according to data from the CME FedWatch Tool.

Last week, Fed Chair Jerome Powell commented in a speech at the San Francisco Fed that the US central bank is in no rush to cut rates. Even though last week’s Core Personal Consumption Expenditure (PCE) price index came to a touch softer, the Consumer Price Index (CPI) remains above the 3% threshold. That would keep Fed officials with their hands tied and adhere to the higher for longer mantra.

On Tuesday, the UK economic docket will feature the release of Housing Prices, the BoE Consumer Credit, and the S&P Global Manufacturing PMI.