GBP/USD consolidates above 1.2600 ahead of UK labour market data
|- GBP/USD trades sideways near 1.2626 as traders await the key data.
- The markets now anticipate that the Fed will begin easing rates in May or June.
- BoE’s Bailey said the central bank is seeing signs of an upturn in the UK economy.
- Investors will monitor the UK labour market data, US inflation data for fresh catalysts.
The GBP/USD pair consolidates in a narrow trading band above the 1.2600 mark during the early Asian session on Tuesday. The UK labor market and US inflation report will be in the spotlight later in the day. These events could trigger volatility in the market. At press time, GBP/USD is trading at 1.2626, down 0.02% on the day.
Federal Reserve (Fed) Chair Jerome Powell said last month that the central bank is unlikely to start cutting rates in March, and investors now anticipate that the Fed will begin easing rates in May or June. Several officials said more evidence of inflation data is needed before lowering the rates. The US January Consumer Price Index (CPI) could offer hints about the potential timeline of rate cuts.
On Monday, Bank of England (BoE) governor Andrew Bailey expressed optimism regarding the UK economy and downplayed the importance of forthcoming data that some analysts projected the country entered a technical recession at the end of last year. BoE policymaker Sarah Breeden said last week that the central bank has shifted from tightening rates to thinking about when they might come down as the recent falls in UK inflation have changed the BoE’s outlook. However, BoE policymakers Jonathan Haskel and Catherine Mann emphasized the upside risks to price pressures and supported the case for keeping interest rates high for longer.
The UK labour market data, including Employment Change, ILO Unemployment Rate, and Claimant Count Change will be due on Tuesday. On the US docket, the CPI inflation data for January will be released. The attention will shift to the UK Producer Price Index (PPI) and Gross Domestic Product (GDP) later this week. These events could give a clear direction to the major pair.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.