Ella 
GBP/USD was oscillating between slight gains/losses around the 1.2900 mark during the Asian session on Friday, still some distance from the one-year high hit the previous day.
The US dollar (USD) attracted some buying after the recovery of US Treasury yields and moved away from the nearly three-month low hit the previous day, which in turn was bearish for GBP/USD. Meanwhile, weak US consumer inflation data released on Thursday boosted market bets that the Federal Reserve will start a rate cut cycle in September. This may curb the sharp rise in US bond yields. Apart from this, the general risk-on environment may hinder traders from making aggressive bullish bets around the safe-haven currency GBP.
On the other hand, the British pound (GBP) continued to draw support from Thursday’s data showing that the UK economy grew by 0.4% in May, better than expected. In addition, recent comments from Bank of England (BOE) policymakers also dashed hopes of a rate cut in August. In fact, Catherine Mann, a member of the Bank of England’s Monetary Policy Committee (MPC), said on Wednesday that she would not favor a rate cut until there is a deceleration in service sector prices. In addition, Huw Pill, the Bank of England’s chief economist, pointed out that there is still some work to be done before persistent domestic inflationary factors disappear.
The above fundamental backdrop seems firmly in favor of the bulls, suggesting that the path of least resistance for the GBP/USD currency pair is to the upside. Therefore, any meaningful corrective decline may still be seen as a buying opportunity and is more likely to remain limited. Despite this, spot prices are still expected to close in the green for the third consecutive week. Traders are now looking forward to the release of the US Producer Price Index (PPI) and the University of Michigan Consumer Sentiment Survey later in the North American session on the last day of the week for short-term opportunities.
