GBP/USD flat lines around 1.2900 mark, below one-year peak touched on Thursday

• GBP/USD consolidates the previous day’s strong move up to a one-year peak.
• Rebounding US bond yields revive the USD demand and cap gains for the pair.
• Reduced August BoE rate cut bets should help limit any meaningful downfall.

The GBP/USD pair seesaws between tepid gains/minor losses around the 1.2900 mark during the Asian session on Friday and remains well within the striking distance of a one-year peak touched the previous day. 

The US Dollar (USD) attracts some buyers in the wake of a goodish pickup in the US Treasury bond yields and moves away from a nearly three-month low touched the previous day, which, in turn, acts as a headwind for the GBP/USD pair. Meanwhile, the softer US consumer inflation figures released on Thursday boosted market bets for an imminent start of the Federal Reserve's (Fed) rate-cutting cycle in September. This might keep a lid on any meaningful upside for the US bond yields. Apart from this, the prevalent risk-on environment might hold back traders from placing aggressive bullish bets around the safe-haven buck. 

The British Pound (GBP), on the other hand, continues to draw support from Thursday's data showing that Britain's economy grew more quickly than expected, by 0.4% in May. This comes on top of the recent comments by the Bank of England (BoE) policymakers and dashed hopes for a rate cut in August. In fact, the BoE MPC member Catherine Mann said on Wednesday that until there is some deceleration in services prices, she is not in favor of cutting interest rates. Adding to this, BoE Chief Economist Huw Pill noted that there is still some work to do before the domestic persistent component of inflation is gone.

The aforementioned fundamental backdrop seems tilted firmly in favor of bulls and suggests that the path of least resistance for the GBP/USD pair is to the upside. Hence, any meaningful corrective decline might still be seen as a buying opportunity and is more likely to remain limited. Nevertheless, spot prices remain on track to end in the green for the third successive week. Traders now look forward to the release of the US Producer Price Index (PPI) and the University of Michigan Consumer Sentiment survey, due later during the North American session, for short-term opportunities on the last day of the week.