GBP/USD trades with mild gains above 1.2700, focus on US PCE data

• GBP/USD trades with a mild positive bias around 1.2730 on the softer USD on Friday. 
• The US economy grew at an annualized pace of 1.3% in Q1 versus 1.6% prior. 
• Markets pared bets on the BoE June rate cuts as the UK April CPI eased at a slower pace than estimates.

The GBP/USD pair edges higher near 1.2730 during the early Asian session on Friday. The USD Index (DXY) faces some selling pressure, and this provides some support to the major pair. Investors will closely monitor the US Core Personal Consumption Expenditures Price Index (Core PCE) for April, which is due later on Friday. 

The US economy grew at a slower pace than initially thought during the first quarter (Q1). The second estimate of US Gross Domestic Product (GDP) showed the economy expanded at an annualized pace of 1.3% in Q1 from 1.6% in the previous reading, in line with market expectations, the Bureau of Economic Analysis reported Thursday.

Additionally, the US weekly Initial Jobless Claims for the week ending May 25 rose to 219K from the previous week of 216K, above the market consensus of 218K. Pending Home Sales dropped to -7.7% MoM in April from 3.6% in March. 

Many Federal Reserve (Fed) officials highlighted the need to keep borrowing costs higher for longer to curb persistently elevated inflation. This, in turn, might lift the Greenback and cap the upside for the pair. The US Core PCE, the Fed’s preferred inflation measure, is expected to show an increase of 0.3% MoM in April. This figure might offer some insight into the inflation trajectory. 

On the other hand, the expectation that the Bank of England (BoE) will start cutting the interest rate from the August meeting might weigh on the Pound Sterling (GBP). Nonetheless, investors lowered their bets on June rate cuts as the UK Consumer Price Index (CPI) report for April showed that price pressures eased at a slower pace than estimates.