GBP/USD remains under selling pressure above the mid-1.2700s, UK Retail Sales data eyed

The GBP/USD pair faces rejection near the 1.2700 mark and holds above the mid-1.2700s during the early Asian session on Friday. The downtick of the major pair is backed by the stronger US Dollar (USD) and the dovish tilt of the Bank of England (BoE). Investors await the UK Retail Sales for fresh impetus, which is expected to fall 0.3% in February. GBP/USD currently trades near 1.2658, down 0.02% on the day. 

The BoE kept the interest rate unchanged at 5.25% at its March meeting on Thursday, as widely anticipated. The BoE Governor Andrew Bailey said that the economy is not at a point where the Monetary Policy Committee (MPC) can lower interest rates, but the economy is moving along on the right track. Markets anticipate the UK central bank will need more evidence of moderating wage growth before beginning to cut rates. However, investors maintain bets on BoE rate cuts this year, and the dovish tilt by the BoE policymaker weighs on the Pound Sterling (GBP) and acts as a headwind for the GBP/USD pair. 

On the other hand, the Fed held the rate steady at 5.25–5.50% at its March meeting on Wednesday, with the median FOMC projections retaining three cuts in 2024. The markets have priced in around 80% odds that the Fed will cut rates in June, according to the CME FedWatch Tool. 

On Thursday, the US S&P Global Composite PMI came in at 52.2 in March from 52.5 in February. Meanwhile, the S&P Global Manufacturing PMI improved to 52.5 from 52.2 in the previous reading, above the market consensus of 51.7. The Services PMI eased to 51.7 in March from the previous reading of 52.3, weaker than the estimation of 52.0. 

Moving on, market players will focus on the UK February Retail Sales. Also, Fed Chair Jerome Powell and Michael Barr are set to speak on Friday. Traders will take cues from the data and find trading opportunities around the GBP/USD pair.