Ella 
GBP/USD remains on the defensive in early Asian trade on Tuesday, staying above the 1.2800 support level. Lower bets on interest rate cuts from the Bank of England (BOE) weighed on the pound. Investors are awaiting UK labor market data and US inflation on Tuesday for fresh impetus. GBP/USD is currently trading around 1.2814, unchanged throughout the day.
On Monday, Bank of England policymaker Catherine Mann said that British inflation pressures still have a long way to go to reach the central bank’s 2% target. UBS Global Research said on Monday that it expects the Bank of England to start cutting interest rates by 25 basis points (bps) in August, compared with the previous expectation of a cut in May.
On the other hand, market caution before important events in the United Kingdom and the United States may provide some support for safe-haven assets such as the U.S. dollar. The U.S. Consumer Price Index (CPI) for February is expected to remain stable, with inflation expected to be at an annual rate of 3.1%, with core inflation expected to ease to 3.7% from 3.9%. Stronger-than-expected inflation data will further dampen prospects for the Federal Reserve to cut interest rates in the near term. This could therefore boost the US dollar and be negative for the GBP/USD pair.
Market participants will closely monitor UK labor market data, including changes in employment, changes in claimants, the ILO unemployment rate and average earnings. In the United States, February inflation data will be released later on Tuesday. These events can trigger market volatility and provide direction for the GBP/USD pair.
