GBP/USD extends the upside above 1.2700, focus on UK-US PMI data

• GBP/USD trades on a stronger note around 1.2720 in Thursday’s early Asian session. 
• The FOMC Minutes showed the participants worried over the lack of progress on inflation towards its 2% target. 
• The UK CPI rose by 2.3% YoY in April, compared to 3.2% in March, above the consensus of 2.1%. 

The GBP/USD pair extends the rally near 1.2720 during the early Asian section on Thursday. The uptick of the major pair is bolstered by the hotter-than-expected UK CPI inflation data, which slashed June rate cut bets from the Bank of England (BoE). Later in the day, the flash Purchasing Managers Index (PMI) reports from the UK and US will be released. 

The minutes from the recent policy meeting of the Federal Open Market Committee (FOMC) released Wednesday showed that the officials expressed more concern about inflation as it was more stubborn than expected to start in 2024, making the Fed lack the confidence to move forward on interest rate cuts. Fed Chair Jerome Powell highlighted last week that the Fed will “need to be patient and let restrictive policy do its work” as inflation remains high. Investors see nearly 60% odds of first-rate cuts from the Fed in September, according to the CME FedWatch Tool.