GBP/USD posts modest gains above the mid-1.2600s amid mixed US data

The GBP/USD pair posts modest gains above the mid-1.2600s during the early Asian trading hours on Friday. The decline of the US Dollar (USD) provides some support to the major pair. At press time, GBP/USD is trading at 1.2663, adding 0.02% on the day. 

The US Initial Jobless Claims for the week ending February 17 fell to 201K from the previous weeks of 213K. Continuing Claims dropped to 1.862M, below expectations and the prior week. The report suggested the US labor market remains robust and might convince the Federal Reserve (Fed) to delay cutting interest rates.

Investors have pushed back their expectations for the first rate cut from the Fed to June from May due to a solid job market and hotter-than-expected inflation readings in January.

On Thursday, the US Manufacturing PMI improved to 51.5 in February from 50.7 in the previous reading, better than the estimation of 50.5, the highest reading in 16 months. Meanwhile, the Services PMI eased to 51.3 in February from 52.5 in January, weaker than 52.00 expected. 

On the Pound Sterling front, the UK preliminary Manufacturing PMI for February came in at 47.1 versus 47.0, missing market expectations of 47.5. The Services PMI was unchanged at 54.3 but above the consensus of 54.1. Finally, the Composite PMI arrived at 53.3, against expectations and the previous reading of 52.9. 

Moving on, investors will take more cues from the Fed Christopher J. Waller speech on Friday. Next week, the US Gross Domestic Product Annualized (GDP) for the fourth quarter will be released.