Ella 
In early Asian trading on Friday, GBP/USD remained on the defensive, near 1.2430. GBP/USD’s downside was supported by a stronger greenback as strong U.S. economic data and hawkish comments from Federal Reserve (FED) officials fueled speculation that the central bank will delay a rate cut until September.
On Thursday, Atlanta Fed President Raphael Bostic said that U.S. inflation levels are too high and the central bank still has some way to go on the inflation issue. Bostic further said he was willing to be patient and could cut interest rates before the end of the year. New York Fed President John Williams stressed that the Fed’s policy relies on economic data and noted that he did not believe a rate cut was urgently needed. Investors now see a nearly 66% chance the Fed will cut interest rates in September, according to the CME FedWatch tool.
In terms of data, the number of people filing for unemployment benefits in the United States in the week ending April 13 was lower than market expectations, an increase of 212,000 from the previous week’s 212,000. Meanwhile, the Philadelphia Fed manufacturing index jumped to 15.5 in April from 3.2 in March, above expectations of 1.5. Finally, U.S. existing home sales fell 4.3% monthly to 4.19 million from 4.38 million, missing expectations of 4.2 million.
In terms of sterling, expectations that the Bank of England (BOE) may cut interest rates before the Federal Reserve weighed on GBP/USD. However, Bank of England policymaker Megan Greene said on Wednesday that a rate cut is not imminent, and that high inflation and weak economic growth mean there is still some way to go before inflation returns to target levels. Green also said that recent tensions in the Middle East may pose risks to the inflation outlook, including raising inflation expectations. The comments failed to lift the pound from near six-month lows. Investors will get more clues from UK retail sales for March and speeches from Bank of England governors Lumsden and Britton later on Friday.
