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GBP/USD treads water ahead of US CPI, UK wage growth data

The GBP/USD currency pair traded little changed at the start of the week, as market players shift their focus to the US consumer inflation and to the UK wage growth data for more clues over central bank rate outlook.

Annual consumer price inflation in the United States probably slowed to 3% in January, according to market consensus, from 3.4% in December.

Annual core CPI inflation is expected to have decelerated to 3.8% in January from 3.9% in December – a 2 1/2-year low.

According to LSEG’s IRPR app, there is a 65% chance of a Fed rate cut at the bank’s May meeting.

Meanwhile, average weekly earnings including bonuses in the United Kingdom probably increased 5.7% year-on-year in the three months to December, slowing down from a 6.5% growth in the three months to November.

Average weekly earnings excluding bonuses probably rose 6% year-on-year, slowing from a 6.6% growth in the previous period.

The official data will be released at 7:00 GMT on Tuesday.

Investors will also be paying attention to remarks by Federal Reserve officials, with at least 7 Fed representatives scheduled to make speeches this week.

As of 11:13 GMT on Monday the GBP/USD currency pair was inching down 0.03% to trade at 1.2622.

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