GBPUSD encounters some supply on Friday.

GBPUSD continues to struggle to achieve acceptance above the 1.2400 level, and it comes under some selling pressure. Throughout the first half of the European session, cable has been on the defensive against US Dollar. Presently trading around the 1.2380-1.3375 range, just a few points above the daily low.

A milder risk tone & rising US bond rates support the USD while weighing on the GBPUSD.

A number of factors are supporting the US Dollar, which is seen placing some negative pressure on the British Pound. The revelation of better-than-expected US GDP numbers on Thursday fanned anticipation that the Fed will retain its aggressive posture for a longer period of time. This, in turn, leads an intraday rise in US Treasury bond rates, which supports the safe-haven market combined with a milder risk tone. Meanwhile, the USD is failing to attract significant purchasing as investors remain optimistic that the Fed would modify its aggressive attitude and deliver a modest 25 basis point increase next week.

Furthermore, expectations that rising consumer inflation may push the Bank of England (BoE) to keep raising interest rates boost the British Pound. This, in turn, should restrict any major decline for the GBPUSD pair for the time being.

Traders are looking for some momentum from the US PCE ahead of crucial central bank meetings next week.

Traders were hesitant as well, preferring to await the publication of the Fed’s favored inflation indicator, the Core PCE Price Index. The data will be crucial in determining the course of the US central bank’s rate hikes, which will fuel USD demand and offer some momentum to the GBPUSD pair. The emphasis, however, is on will be focused on next week’s important central bank event risks, which include the FOMC policy decision on Wednesday and the BoE meeting on Thursday.