Sterling rose against the Dollar on Monday yet stayed close to August’s two-month lows as traders continued to determine the Pound’s outlook.

Data out last Friday revealed the US economy generated more jobs than forecast last month but showed signs the labour market may be decelerating. This impacted the Dollar and helped Sterling enjoy its best weekly performance in over a month, Reuters reports.

At the time of writing, the Pound gained 0.3% at $1.26265 and has risen 4.4% for the year to date, tied with the Swiss Franc for the best-performing major currency against the Dollar.

However, this is behind the 8.6% year-to-date gain registered a little over two months ago, Reuters reports.

Traders now forecast the Bank of England is planning at least one, perhaps two, additional rate hikes. Indeed, the chances of a 25-basis point rise at the central bank’s 21st September meeting are close to 90%, with another increase highly likely for November.

This is in contrast to the US, where traders expect the Federal Reserve will unlikely hike rates again in the foreseeable future. Whilst in the eurozone, investors believe there is a 50/50 chance of another rate rise by the end of the year.

If the Bank of England does hike rates another two more times, the UK will have the highest interest rates out of the G10, which hasn’t happened in four decades, the Reuters report goes on to add.

Yet some analysts are of the opinion that two more rate hikes could be too much, and the Bank of England will likely deliver just one more.

According to data published at the end of last week, speculators reduced their Sterling long position by nearly a fifth. Yet their bullish bet on the currency remains near its largest since the middle of 2014.

“We do still, however, believe that the market prices about 20bp too much into the BoE tightening cycle and that Sterling can soften a little in the fourth quarter,” said ING strategist Chris Turner.