GBP Retreats from Weekly High as Dollar Strengthens Ahead of BoE and US Data

The British Pound's recent rally came to an end as it pulled back from its weekly high against a strengthening US Dollar. The GBP/USD pair retreated after failing to sustain gains above $1.2700, reflecting a cautious tone in currency markets.

The US Dollar found renewed buying support due to rising US Treasury yields and a general risk-off sentiment in global markets. This is ahead of the Federal Reserve's preferred inflation gauge, the core PCE price index, which is set to be released later this week.

The Bank of England (BoE) is widely expected to keep its key interest rate steady at 5.25% when it announces its decision on Thursday. However, the tone of the accompanying statement and the vote split among policymakers will be closely scrutinized for any signals on the timing of potential rate cuts later in the year.