GBP/USD holds above the 1.2800 mark, eyes on UK labour market, US CPI data

The GBP/USD pair remains on the defensive above the 1.2800 support during the early Asian trading hours on Tuesday. The lower bets on rate cut expectations from the Bank of England (BoE) weigh on the Pound Sterling (GBP). Investors await the UK labour market data and US CPI inflation data on Tuesday for fresh impetus. GBP/USD currently trades near 1.2814, unchanged for the day.

The BoE policymaker Catherine Mann said on Monday that the UK has a long way to go for inflation pressures to be consistent with the central bank's 2% target. According to UBS Global Research on Monday, the BoE is anticipated to begin lowering interest rates, with a 25 basis point (bps) cut in August, compared to its prior expectation of a cut in May.

On the other hand, a cautious mood in the market ahead of the key events from both the UK and US might provide some support to safe-haven assets like the US Dollar (USD). The US February Consumer Price Index (CPI) figure is estimated to remain steady at 3.1% YoY, and the Core CPI is projected to ease from 3.9% to 3.7% in February. A stronger-than-expected CPI report would further dampen hopes of a rate cut by the Fed over the near term. This, in turn, might boost the Greenback and create a headwind for the GBP/USD pair.

Looking ahead, market players will keep an eye on the UK labor market data, including Employment Change, Claimant Count Change, ILO Unemployment Rate, and Average Earnings. On the US docket, the CPI inflation data for February will be released later on Tuesday. These events could trigger the volatility in the market and give a clear direction to the GBP/USD pair.