Anna 
In Monday’s European session, the Pound Sterling (GBP) maintained a narrow range around 1.2850 against the US Dollar (USD) as investors exercised caution in a week filled with significant economic data. The GBP/USD pair traded sideways ahead of crucial reports from the United Kingdom, including Employment and monthly Gross Domestic Product (GDP), scheduled for release on Tuesday and Wednesday, respectively.
Investors are closely watching the UK labor market data for the three months ending in January, which will provide insights into job and wage growth momentum. Persistent wage growth could potentially delay market expectations for rate cuts by the Bank of England (BoE) until the August meeting. BoE policymakers have acknowledged inflationary pressures but anticipate a return to the 2% target by summer, with the possibility of a resurgence afterward.
Beyond the UK borders, the Pound Sterling’s performance will be influenced by global market sentiment, particularly driven by the release of the United States Consumer Price Index (CPI) data for February on Tuesday. The outcome of this data could impact expectations regarding a potential Federal Reserve (Fed) interest rate cut in June. Despite strong hiring reported in the US Nonfarm Payrolls (NFP) for February, concerns about a cooling labor market, rising Unemployment Rate, and softened wage growth have sustained expectations for a Fed rate cut in June. The intricate interplay between these factors continues to shape the trajectory of the GBP/USD pair amidst ongoing economic uncertainty.
