The GBP/USD pair continues to trade sideways through the Asian session on Tuesday, hovering around the 1.3365–1.3370 zone and showing little change on the day. Market participants remain cautious, preferring to stay on the sidelines ahead of a busy calendar of macroeconomic releases and key central bank decisions later this week.
Focus will first turn to the UK monthly employment report due later today, followed by the delayed US Nonfarm Payrolls data for October. Attention will then shift to the UK Consumer Price Index figures on Wednesday and the Bank of England’s policy announcement on Thursday, both of which are expected to be critical drivers for the British Pound. In addition, US inflation data scheduled for Thursday could help shape the near-term direction of GBP/USD.
For now, the Pound remains under some pressure as markets increasingly price in a Bank of England rate cut at this week’s meeting, keeping GBP bulls cautious. A mild deterioration in global risk sentiment has also weighed on the currency, supporting demand for the relatively safer US Dollar. However, upside momentum in the Greenback remains limited amid growing expectations that the Federal Reserve could deliver two additional rate cuts.
Further capping the US Dollar, investors continue to factor in the possibility that a Trump-aligned Fed chair could adopt a notably dovish policy stance, potentially easing rates irrespective of near-term economic conditions. As a result, the USD remains close to a two-month low, providing some support to GBP/USD. The pair has so far managed to hold above the technically important 200-day Simple Moving Average near 1.3350, a level that is likely to act as a key near-term pivot for intraday traders.
