The pound struggled for direction on Monday (25 July), failing to register sharp moves away from last week's closing levels, as a lack of economic data meant investors waited on the sidelines.

Sterling rose 0.11% against the dollar and slid 0.05% against the euro, exchanging hands at $1.3126 and €1.1948 respectively. However, the relative calm that greeted the first session of the week could evaporate as soon as Wednesday, when market participants will analyse the latest gross domestic product figures.

"The domestic focus for sterling this week will be Wednesday's second-quarter UK GDP report, although it will only really give insight into where the economy was heading before the referendum," said Chris Saint, senior analyst at Hargreaves Lansdown currency service.

Elsewhere, the dollar extended a two-week rally against the yen, gaining 0.1% against the yen to ¥106.28, as it built on the 5.6% advance recorded over the last two weeks.

The gains came as investors bet the US Federal Reserve will on Wednesday confirm interest rates will remain unchanged and that it is on course to raise interest rates later this year. Markets also expect the Bank of Japan to implement further stimulus measures this week.

"Inaction from both the Bank of England and the European Central Bank point towards a measured approach from the central banks despite the fears of what may come after the EU referendum result," said Joshua Mahony, market analyst at IG.

"However, amid the widespread expectations of action from the BoJ, the committee is in a Catch-22 situation where they almost need to act simply to avoid the appreciation that would happen to the yen otherwise."

Meanwhile, the euro gained 0.06% against the greenback and was trading at $1.0984.