GBP/USD drops to a nearly three-week low on Friday

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GBP/USD slides to nearly three-week low, eyes mid-1.2600s amid modest USD strength

The GBP/USD pair remains depressed for the second successive day on Friday and touches a nearly three-week low, around the 1.2765 region during the Asian session.

The US Dollar (USD) builds on the previous day's strong rally from a one-week low and climbs to its highest level since July 10, which, in turn, is seen as a key factor exerting some pressure on the GBP/USD pair. Thursday's upbeat US macro data pointed to an extremely resilient US economy and increased the likelihood that the Federal Reserve (Fed) could further hike interest rates. The US Commerce Department reported that the world's largest economy expanded by 2.4% annualized pace during the April-June quarter, beating expectations. Adding to this, the Initial Jobless Claims unexpectedly fell to 221K in the week ended July 22.

GBP/USD stays defensive at three-week low near 1.2800 ahead of US PCE Inflation data

GBP/USD licks its wounds at the lowest level in two weeks, making rounds to 1.2790-2800 during Friday’s Asian session, amid the market’s consolidation ahead of the Federal Reserve’s (Fed) preferred inflation gauge. It should be noted that the Cable pair dropped the most since early March the previous day after the US Dollar rallied on the upbeat data. Also weighing on the Pound Sterling price could be the concerns challenging the Bank of England (BoE) hawks.

On Thursday, Bloomberg came out with news suggesting the dislike among British Chancellor Jeremy Hunt’s advisers for the BoE’s rate hike considering the looming fears of an economic slowdown. The news signals the advisers’ fears of recession if the BoE fastens its rate hike trajectory.

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