GBP/USD consolidates around mid-1.2700s, downside seems cushioned amid softer USD

• GBP/USD draws support from a softer USD and bets for a delayed BoE rate cut.
• The UK political uncertainty keeps a lid on any meaningful upside for the GBP.
• Traders now look forward to the release of the US ISM PMI for a fresh impetus.

The GBP/USD pair kicks off the new week on a subdued note and oscillates in a narrow band, around mid-1.2700s during the Asian session. The downside, meanwhile, remains cushioned in the wake of a modest US Dollar (USD) weakness, weighed down by signs of easing inflationary pressures in the United States (US). 

The US Bureau of Economic Analysis reported on Friday that the Personal Consumption Expenditure Price Index (PCE) held steady at 2.7% on a yearly basis in April. Adding to this, the Core PCE Price Index, which excludes volatile food and energy prices, matched consensus estimates and rose 2.8% on a yearly basis. The data should allow the Federal Reserve (Fed) to cut interest rates later this year. Apart from this, a generally positive risk tone seems to undermine the safe-haven USD, which, in turn, is seen acting as a tailwind for the GBP/USD pair. 

The British Pound (GBP), on the other hand, draws support from expectations that more persistent price pressures in the United Kingdom (UK) might force the Bank of England (BoE) to keep interest rates at their current level for a little bit longer. That said, the uncertainty ahead of the UK general election on July 4 is holding back the GBP bulls from placing aggressive bets and capping the upside for the GBP/USD pair. Traders now look to the release of the Manufacturing PMIs from the UK and the US for some impetus ahead of the US ISM Manufacturing PMI.