GBP/USD consolidates above mid-1.3200s as traders move to the sidelines ahead of BoE this week

The GBP/USD pair kicks off the new week on a subdued note and oscillates in a narrow trading band around the 1.3260-1.3265 area, near a one-week low touched during the Asian session.

The US Dollar (USD) remains on the defensive below a multi-week top amid heightened economic uncertainty on the back of US President Donald Trump's tariff plans and turns out to be a key factor acting as a tailwind for the GBP/USD pair. Adding to this, the prospect of more aggressive policy easing by the Federal Reserve (Fed) further seems to undermine the Greenback.

Despite the better-than-expected release of the US Nonfarm Payrolls (NF) report on Friday, investors seem convinced that the US central bank will resume its rate-cutting cycle in June and lower borrowing costs by 100 basis points by the end of this year. This, along with the optimism over the potential de-escalation of the US-China trade war, dents demand for the safe-haven buck.

Traders, however, seem reluctant to place fresh bullish bets around the GBP/USD pair and opt to wait for this week's key central bank event risk – the Bank of England (BoE) monetary policy meeting on Thursday. The UK central bank is widely expected to cut interest rates by 25 bps and adopt a slightly dovish stance amid downside risks to growth from the trade war.

Apart from this, traders this week will take cues from the outcome of the crucial two-day FOMC policy meeting on Wednesday, which will influence the USD price dynamics and provide some meaningful impetus to the GBP/USD pair. In the meantime, Monday's release of the US ISM Services PMI will be looked upon to grab short-term opportunities later during the early North American session.