GBP/USD trims gains above 1.2750 amid US Dollar rebounds

• GBP/USD trades with a mild negative bias near 1.2760 on Wednesday. 
• The US CB Consumer Confidence Index improved to 102.0 in May. 
• The IMF raised the UK growth forecasts but anticipated two to three rate cuts from the BoE.

The GBP/USD pair trades with mild losses around 1.2760 during the Asian session on Wednesday. The modest recovery of the US Dollar  (USD) and US yields amid the diminishing expectations of a rate cut by the US Federal Reserve (Fed) in September weighs on the major pair. The Fed’s Beige Book is due later on Wednesday and the Fed’s John Williams is due to speak.

Consumer Confidence improved slightly in May, the Conference Board reported on Tuesday. The figure rose to 102.0 in May from 97.0 in April, beating the estimation of 95.9. However, US consumers remain concerned about inflation, and many households believe interest rates will be higher over the next year.

Meanwhile, US Fed officials delivered more hawkish comments, boosting the Greenback broadly. Fed Governor Michelle Bowman said on Tuesday that she would have supported either waiting to start slowing the quantitative tightening pace or a more moderate tapering process than announced earlier this month. Fed Minneapolis President Neel Kashkari said that the central bank should wait for significant progress on inflation before cutting interest rates, adding that he expected no more than two rate cuts in 2024.

On the other hand, the expectation that the Bank of England (BoE) will start cutting the interest rate in June drags the Pound Sterling (GBP) lower. The International Monetary Fund (IMF) raised the UK growth forecasts but anticipated two to three rate cuts from the BoE. Amid the absence of top-tier economic data releases from the UK, the election speculation could drive movement in the Cable. The worries about political uncertainty might hurt the GBP and create a headwind for the GBP/USD pair.