GBP/USD Steadies Near 1.2700 as Dollar Finds Footing

The British pound experienced modest downward pressure against the US dollar on Tuesday as the greenback steadied above a three-month low.

This stabilization follows a period of dollar weakness driven by growing market bets that the Federal Reserve may begin cutting interest rates sooner than previously anticipated.

The UK economy has shown surprising strength, with GDP growth beating expectations in the first quarter, while inflation remains above the Bank of England's 2% target.

This divergence in monetary policy expectations has provided some support to the pound, limiting its downside against the dollar.