The British pound traded below $1.35 on Monday as markets braced for two key events that could sway its direction. Bank of England Governor Andrew Bailey and economist Megan Greene are set to testify before the Treasury committee on Tuesday, with any hints about potential rate cuts for the March 19 decision likely to impact currency markets.

Analysts at ING suggest that if Bailey and Greene signal a move toward the rate-cutting camp, pricing for a March cut could firm up to 25 basis points from the current 20 basis points. The second major event risk is the UK by-election in Gorton and Denton on Thursday, where a heavy defeat for the ruling Labour Party could reignite speculation about leadership challenges and weigh on sterling.

As of 11:52 GMT, the pound stood at 1.3495 against the dollar, up 0.08%, while the euro-pound exchange rate was at 0.8734, down 0.05%. ING analysts expect the EUR/GBP pair could end the week closer to 0.88, depending on the outcomes of these events. The pound's trajectory this week will largely hinge on the BoE's stance on monetary policy and the political implications of the by-election results.