Pound sterling is struggling for direction as investors await the Bank of England’s comments on inflation and interest rates.

The Pound Sterling (GBP) trades sideways in Tuesday’s European session. As market sentiment remains slightly negative ahead of the release of the Federal Reserve Open Market Committee (FOMC) minutes. Which will provide a new outlook on interest rates. Today, Bank of England (BoE) Governor Andrew Bailey and other policymakers will speak before the United Kingdom Parliament to provide guidance on inflation and interest rate forecasts.

The UK inflation outlook has become more stubborn in the face of strong consumer expenditure.

Investors expect to maintain Andrew Bailey and his companions’ hawkish talk comes. Despite growing doubts about achieving long term price stability. Robust wage growth, sticky service inflation. And strong consumer expenditure all point to a stubborn inflation forecast. Allowing the Bank of England to take a wait and see strategy before considering rate cuts. The Pound Sterling’s desirability may improve if BoE policymakers provide aggressive signals.

This week’s GBPUSD pair will be guided by the preliminary S&P Global Manufacturing and Services PMI for February, which will be released on Thursday.

Daily Market Movers: Pound Sterling is cautious ahead of the FOMC minutes.

The pound sterling continues below 1.2600, as market sentiment remains cautious.
The Pound Sterling will be led by Bank of England Governor Andrew Bailey and other Monetary Policy Committee (MPC) members spoke before Parliament’s Treasury Committee about the inflation and interest rate forecast.
Andrew Bailey and his colleagues are expected to continue a hawkish stance on interest rates, as momentum in service inflation and wage growth exceeds what is required to bring inflation down to the 2% objective.
Aside from that, strong retail sales numbers for January suggest that the impact of the BoE’s aggressive attitude on interest rates is diminishing.
Furthermore, increased household spending would help the UK economy recover from a recession.
Last Monday, the BoE’s Chief Economist Huw Pill urged to remain patient for rate decreases. current inflation data is insufficient to convince that inflation will fall steadily to the 2% target.
Meanwhile, the near-term outlook for the Pound Sterling has improved. According to weekly statistics from the Commodity Futures Trading Commission (CFTC), speculators increased their bullish sterling position to $3.971 billion in the week ending February 13, just short of last July’s nine-year high, Reuters reported.

This week, investors will concentrate on the preliminary S&P Global/CIPS Manufacturing and Services PMI for January. Manufacturing PMI is expected to grow to 47.5 from 47.0. While Services PMI will fall to 54.1 from 54.3 in December.
On the United States front, the US Dollar Index. Which monitors the Greenback’s value against six rival currencies, recovered to 104.40 amid uncertainties. Ahead of the FOMC minutes from the January policy meeting. Which will be issued on Wednesday.

USD Index struggles to deliver a meaningful recovery as Federal Reserve policymakers remain convinced that inflation is heading in the right direction.

The USD Index struggles to deliver a meaningful recovery. As Federal Reserve policymakers remain convinced that inflation is heading in the right direction despite higher than expected. Consumer price inflation and Producer Price Index (PPI) data for January.