• The Pound Sterling ranges against the US Dollar near 1.2850 with a focus on Fed/BoE policy meetings.
• Traders raise BoE rate-cut bets despite stubborn UK service inflation.
• Investors see the Fed delivering a dovish interest rate guidance.

The Pound Sterling (GBP) trades in a tight range near 1.2850 against the US Dollar (USD) in Tuesday’s London session. The GBP/USD pair consolidates inside Monday’s trading range with a focus on interest-rate decisions by the Federal Reserve (Fed) and the Bank of England (BoE) on Wednesday and Thursday, respectively. 

The Fed is widely anticipated to maintain the status quo for the eighth consecutive meeting. Therefore, investors will keenly focus on the monetary policy statement and Fed Chair Jerome Powell’s press conference to get fresh cues about rate cut prospects.

Market experts see the Fed sending a clear message that rate cuts are highly likely in the September meeting amid significant progress in inflation declining towards the bank’s target of 2% and increasing risks to labor market strength. The scenario would be unfavorable for the US Dollar and bond yields. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major peers, edges higher to 104.70. 10-year US Treasury yields rise to near 4.18%.