Sterling declined against the Dollar in Monday trade yet gained against the Euro following on from the past week's Bank of England rate hike and indications for future monetary policy.

At the time of writing, the Pound was down 0.24% against the Dollar at $1.27215, just over its five-week low against the greenback of $1.26200 reached after the central bank's decision.

Last Thursday, the Bank of England hiked rates by 25 basis points to 5.25%, down from June's 50 basis point rise, yet said high inflation signalled rates would remain high for some time.

As it stands, markets are pricing in another two 25 basis point rate rises from the Bank of England, Reuters news agency reports.

This is in comparison to pricing that reflects forecasts that the Federal Reserve has completed its hiking cycle, and the likelihood the European Central Bank has also finished.

Moreover, at the time of writing, the Euro was trading down 0.17% at 86.23 pence.

"I think markets, in terms of the Pound, are slowly digesting where the Bank of England is going to end up," according to Nick Rees, FX analyst at Monex Europe.

"That's the key for us in terms of where the Pound ends up, and that's really going to really hang on the jobs and wages data that we see next week.

"It's a case of wait and see, and perhaps wait to see what Huw Pill says later today."

Huw Pill, the chief economist at the Bank of England, is speaking on Monday afternoon, whilst UK GDP data for Q2 is due to be published on Friday, yet will unlikely trigger a major reaction in Sterling, Rees added.

In addition, US inflation data is due to be published on Thursday, which will either reinforce or contest market forecasts the Federal Reserve's rate hiking cycle has ended.