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The pound’s recent strong rally has slowed, with traders looking for direction in a quiet week for UK economic data. Sterling is down 0.2% against the dollar, trading around $1.311, after losing over 1% in the past five days. 

The dollar is near a two-week high ahead of key US data, including manufacturing PMI and Friday’s jobs report. These figures will influence whether the US Federal Reserve cuts rates by 25 or 50 basis points in September.

Analysts at Panmure Liberum believe the UK will outperform other major economies in the coming months, thanks to stronger domestic demand.

Recent PMI data shows the UK saw growth in output and new orders in August, unlike the US and other major European economies.