GBP rose against most of its major counterparts in the European session on Tuesday, as worries about the spread of the COVID-19 Delta variant and its implications for the UK’s economy eased as coronavirus cases had continued to decrease and market participants turned their focus to the upcoming policy meeting of the Bank of England (BoE).

The UK’s government reported that there were 21,952 new coronavirus cases and 24 new deaths on Monday, August 2, down from 24,470 infections and 65 fatalities recorded the previous day. Meanwhile, the 7-day average of new COVID-19 cases declined 27% to 84,550 from the previous week. The latest official data indicated that the recent wave of coronavirus infections, driven by the Delta variant, is slowing down, raising hopes that there won't be a need for the reimposition of restrictions in Britain and that the UK's economy could continue its strong rebound.

Market participants also prepared for the BoE’s August policy meeting, the outcomes of which are set to be announced on Thursday. It is expected that the British central bank will leave its policy stance unchanged at this week’s meeting, but its officials may give a signal of a hawkish turn.