Sterling edged down versus the greenback and euro on Monday, with investors awaiting key wages figures due later in the week to understand further Bank of England's decisions on monetary policy.
The pound dipped 0.2 percent to $1.4007, sliding 2 percent from an 18-month peak touched in late January. The British currency also lost 0.1 percent to 88.57 pence per euro.
Traders have been betting on an interest rate increase in May, but experts consider any such tightening decisions is dependent on salary growth accelerating, and on whether the government can soon achieve a transition deal for the two years after departure from the EU.
The shift in forecasts followed an unexpected hawkish BoE meeting when it said interest rates would need to increase faster, in order to get inflation back within the target set by central bank.