Ella 
In early Asian trading on Friday, GBP/USD lost rebound momentum and was around 1.2695. GBP/USD is trading lower following a pullback from recent highs near 1.2760 amid renewed demand for the US dollar (USD). Later on Friday, UK retail sales, US durable goods orders and Michigan consumer confidence will be released.
On Thursday, the U.S. S&P Global Composite Purchasing Managers’ Index (PMI) climbed to 54.4 in May from 51.3 in April, above expectations of 51.1. At the same time, the manufacturing purchasing managers’ index rose to 50.9 in May from the previous value of 50.0. The services purchasing managers’ index in April rose to 54.8 from 51.3 the previous month. Both data were better than market expectations.
A surge in manufacturing input prices suggests inflation could pick up in the coming months, which could prompt the Federal Reserve to delay plans to cut interest rates this year. This in turn provides some support for the US dollar and is negative for the GBP/USD currency pair.
On the other hand, the UK Consumer Price Index inflation report earlier this week prompted investors to reduce their bets on a rate cut by the Bank of England (BOE) next month. Investors believe that the probability of starting an interest rate cut in August is close to 50%, and they have not fully priced in a 25 basis point interest rate cut by the Bank of England before November.
