GBP/USD oscillates around 1.3070 ahead of key data events

• GBP/USD oscillates around 1.3070 ahead of the US Retail Sales data.
• Market participants anticipate the Bank of England (BoE) will hike its interest rates by 50 basis points (bps) in August.
• The US Dollar posts modest gains due to the softer Chinese growth numbers, upbeat US Empire manufacturing survey.

The GBP/USD pair consolidates in a narrow range during the early Asian session on Tuesday as the market sentiment turns cautious ahead of the release of US Retail Sales and the UK Consumer Price Index (CPI). The major is trading around 1.3072, down 0.01% on the day. 

The UK will release the Consumer Price Index (CPI) for June on Wednesday, which is expected to be 8.2% YoY, from 8.7% in May, while the core CPI is estimated to be 7.1%, unchanged from May. Market participants anticipate the Bank of England (BoE) will hike its interest rates by 50 basis points (bps) in August. However, the aggressive tightening policy from the BoE to bring inflation to the target level would dampen the economic prospects of Britain's economy. 

On the other hand, the US Dollar Index, as measured by the Greenback against a basket of six foreign currencies, posts modest gains due to the softer Chinese Gross Domestic Product (GDP) data for the second quarter and the upbeat US Empire manufacturing survey from July. The Federal Reserve Bank of New York reported Monday that the NY Empire State Manufacturing Index dropped from -5.5 to 1.1, above expectations of -3.5.

Looking ahead, market participants will take cue from the US Retail Sales, which expected to rise 0.5% versus 0.3% prior. However, the key focus will be Wednesday's UK Consumer Price Index (CPI). This figure would have a significant impact on the pair and help determine the next direction for the GBP/USD pair.