GBP/USD oscillates in a range above the 1.2600 area, investors await UK PMI data

• GBP/USD flat-lines in a 1.2622-1.2630 range in the early Asian session on Tuesday.
• Traders anticipate that the Bank of England (BoE) is likely to raise 25 basis points (bps) in the upcoming meeting.
• A mixed US employment data and upbeat manufacturing PMI decreases Fed tightening expectations.
• Market players will focus on the UK S&P Global/CIPS Composite PMI and Services PMI.

The GBP/USD pair oscillates in a narrow range above the 1.2600 mark during the early Monday’s Asian session. The major pair currently trades near 1.2628, gaining 0.01% on the day.

Traders anticipate that the Bank of England (BoE) is likely to raise 25 basis points (bps) in the upcoming meeting. The BoE Chief Economist Huw Pill noted last week that inflation in the UK remained too high and that many measures are in place. BoE’s aggressive tightening of monetary policy might put some pressure on the British Pound (GBP) since investors are concerned about the effect on the UK economy.

The data released last week revealed that August was the weakest month for British factories since the beginning of the COVID-19 crisis. The S&P Global/CIPS Manufacturing PMI came in at 43.0 In August from 45.3 in July. The figure marked the six consecutive months below the 50 threshold.

Across the pond, market players bet on the less hawkish stance of the Federal Reserve (Fed) following the mixed economic data results last week. The odds of holding the interest rate at the September meeting remain at 93%, while the probability of raising rates in its November meeting is around 38%, according to the CME FedWatch Tool.

About US data last week, August's Nonfarm Payrolls (NFP) came in at 187K, better than market expectations of 170K and the previous reading of 157K. Nevertheless, the Unemployment Rate fell substantially to 3.8%, compared to the market consensus and the previous rate of 3.5%. The US Manufacturing PMI came in at 47.6 versus 46.4 previously and exceeded expectations of 47.0. The upside of the Greenback seems limited as Wall Street is closed today in observance of Labor Day.

Moving on, market participants will take cues from the UK S&P Global/CIPS Composite PMI and Services PMI for August due later on Tuesday ahead of the US Factory Orders in the North American session. The attention will shift to the US ISM Services PMI on Wednesday. The figure is expected to rise to 52.6. Traders will find the trading opportunity around the GBP/USD pair.