GBP/USD continues to move sideways near 1.3850 after US data

GBP/USD is struggling to make a decisive move in either direction.
US Dollar Index stays above 93.00 after US data.
Fed’s Mester and Evans will be delivering speeches later in the day.

Following Monday’s decline, the GBP/USD pair is moving sideways on Tuesday amid a lack of fundamental drivers and high-tier macroeconomic data releases. As of writing, the pair was posting small daily gains at 1.3854.

DXY holds above 93.00 after mid-tier data

The data published by the US Bureau of Labor Statistics revealed on Tuesday that Unit Labor Costs increased by 1% in the second quarter. Although this reading came in slightly below the market expectation of 1.1%, it failed to trigger a noticeable market reaction. The publication also showed that the Nonfarm Productivity rose 2.3% in the same period. Currently, the US Dollar Index is up 0.12% on the day at 93.07.

There won’t be any other data releases from the US in the remainder of the day and investors will be paying close attention to comments from Cleveland Fed President Loretta Mester and Chicago Fed President Charles Evans.

On Wednesday, the Consumer Price Index (CPI) inflation report will be featured in the US economic docket. Analysts expect the annual CPI to edge lower to 5.3% from 5.4% in June. A stronger-than-expected reading is likely to help the USD preserve its strength while a soft print could limit the DXY’s upside in the near term.

US July CPI Preview: Inflation data unlikely to change Fed tapering expectations.