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• GBP/USD receives support as investors consider UK markets a more attractive investment option.
• BoE is expected to start lowering interest rates at the August meeting.
• The US Dollar strengthens due to increased risk aversion triggered by the attack on former US President Donald Trump.

GBP/USD trades around 1.2960 during the Asian session on Tuesday, remaining close 13-month high at 1.2995 recorded in the previous session. The British Pound (GBP) may appreciate further as investors consider UK markets a more attractive investment destination compared to US markets, which face political uncertainties. The decisive victory of Keir Starmer’s Labour Party has assured stable fiscal policies and smooth ministerial appointments.

The increased uncertainty over the timeframe for Bank of England (BoE) rate cuts has been a significant factor in the GBP’s strength. Traders anticipate the BoE to start lowering interest rates at the August meeting.

Traders assess the upcoming economic data on Wednesday that could impact the Bank of England's monetary policy stance. The Consumer Price Index (YoY) is projected to hold steady at the BoE's 2% target, with core inflation anticipated to dip to 3.4%. Additionally, the Retail Price Index is likely to see a decline, marking the fourth drop in five months.

The US Dollar (USD) strengthened amid rising risk aversion triggered by the attempted assassination of former US President Donald Trump on Saturday. However, cooling US inflation strengthened bets for a Federal Reserve rate cut in September, which may limit the upside of the Greenback.

According to CME Group’s FedWatch Tool, markets now indicate an 85.7% probability of a 25-basis point rate cut at the September Fed meeting, up from 71.0% a week earlier.

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