Ella 
During the Asian session on Wednesday, the pound fell slightly against the dollar, staying away from the two-week high of 1.2870-1.2875 hit the day before. However, downside for GBP/USD remained contained as traders eagerly awaited the latest consumer inflation data from the UK and US.
UK CPI will have a key impact on the Bank of England’s (BOE) monetary policy decisions and drive the pound (GBP). Beyond this, the all-important US CPI report will also be closely watched for clues on the path for the Federal Reserve (Fed) to cut interest rates, which in turn will provide some meaningful impetus to the US dollar (USD), And help determine the next directional trend of GBP/USD.
Pound is likely to continue to draw some support from Tuesday’s unexpected fall in the UK unemployment rate ahead of the release of more impactful macroeconomic data. That largely overshadowed a 135,000 increase in jobless claims in July and a plunge in annual wage growth to 4.5% from 5.7%.
On the other hand, expectations that the Federal Reserve will step up its interest rate cuts weakened the dollar as the U.S. Producer Price Index (PPI) came in lower than expected on Tuesday. Beyond this, the overall positive risk tone puts USD bulls on the defensive, which should serve as a “positive” for the GBP/USD pair. Therefore, any meaningful corrective decline could be viewed as a buying opportunity, but it would still be limited.
