The GBP/USD pair reversed its upward trajectory on Friday, retreating from a multi-week high as the US Dollar strengthened. The pair slid below the critical 1.2700 level during the European session, weighed down by robust US economic data and rising Treasury yields, which bolstered the greenback’s appeal.
Market sentiment shifted as investors digested recent data suggesting resilience in the US economy, raising speculation about prolonged Federal Reserve tightening. Meanwhile, the British pound struggled to maintain momentum despite earlier optimism driven by UK inflation cooling, with traders reassessing the Bank of England’s future policy moves. The broader risk-off mood also added pressure, dampening appetite for risk-sensitive currencies like the pound.
This retreat signals ongoing uncertainty for the currency pair, particularly as traders await additional US employment data that could shape expectations for interest rate differentials.
