The Pound rose against the Dollar and Euro on Wednesday ahead of US economic data and as investors contemplate a likely Labour Party win in July’s elections.

Also on Thursday, the Bank of England's (BoE) Decision Maker Panel on inflation forecasts is due to be released.

ING analysts have recently stated their anticipation for a decline in one-year inflation expectations. They also caution the market against its conservative approach in pricing less than two rate cuts by the Bank of England this year.

Indeed, ING forecasts the BoE to ease policy three times this year, Reuters reports.

As it stands, investors are pricing in over a 50% chance of 25 basis points of rate cuts by the Bank of England by September, discounting 35 basis points of cuts by the end of the year.

In the US, upcoming employment data is set to dominate the macro calendar, following US services data on Wednesday.

At the time of writing, Sterling rose 0.1% to $1.2776. On Tuesday, it reached its highest since mid-March at $1.2817.

Furthermore, ahead of next month’s general election in the UK, the Labour Party is forecast to win by a bigger margin than 1997 under former PM Tony Blair, as per YouGov data earlier this week.

“Labour's focus will likely start with ambitious supply-side policies, from planning reform to boosting employment and education,” stated Sanjay Raja, senior economist at Deutsche Bank.

“Deeper integration with Europe could also boost potential growth, allowing for more spending further down the parliamentary period,” he went on to add.

According to a survey by Nomura, "Many clients think Labour will pursue closer relations with the EU; nearly 90% of clients think it is likely or very likely.”

The Euro was down 0.1% at 85.11 pence per Pound at the time of writing.

“The Pound continued to comfortably outperform the Euro in the past month, as markets view a Labour majority as perhaps the most market-friendly outcome of the pending general election,” according to Matthew Ryan, head of market strategy at Ebury.