GBP/USD holds positive ground above 1.3700, all eyes on US PCE release

• GBP/USD strengthens to around 1.3735 in Friday’s Asian session. 

• Concerns about the Fed's independence and expectations for early US rate cuts weigh on the US Dollar. 

• The US PCE inflation data for May will take center stage later on Friday. 

The GBP/USD pair holds positive ground near 1.3735 during the Asian trading hours on Friday. The prospect of Trump announcing the next Fed Chair weighs on the US Dollar (USD) against the Pound Sterling (GBP). The US Personal Consumption Expenditures (PCE) - Price Index data for May will be in the spotlight later on Friday. 

The concerns over the future independence of the Fed continue to undermine the Greenback and create a tailwind for the major pair. US President Donald Trump said that he was considering selecting the next Fed Chair early fuelled fresh bets on US rate cuts. Trump said that he has a list of potential Powell successors down to “three or four people,” without naming the finalists. 

Furthermore, the weaker-than-expected US Gross Domestic Product (GDP) data also dragged the USD lower. The US economy shrank faster than expected during the first three months this year, falling by 0.5%, the US Bureau of Economic Analysis (BEA) reported on Thursday. This figure came in below the previous estimate and the market consensus of -0.2%.

On the other hand, the dovish remarks from the Bank of England (BoE) might cap the upside for the major pair. BoE Governor Andrew Bailey warned earlier this week that there were now signs that the UK labor market was softening and he emphasized his view that interest rates are likely to continue falling. The UK central bank left interest rates unchanged at 4.25% at the June meeting, although three of the nine members of the Monetary Policy Committee (MPC) voted to cut interest rates.