GBP/USD weakens below 1.2900, US GDP data looms

• GBP/USD trades on a softer note near 1.2895 in Wednesday’s early Asian session. 
• Majority of economists anticipate the BoE to cut the bank rate at its August meeting next week.
• Investors await the preliminary US Q2 Gross Domestic Product, which is due on Thursday. 

The GBP/USD pair edges lower to 1.2895 during the Asian trading hours on Thursday. The higher possibility that the Bank of England (BoE) will begin cutting interest rates in August has undermined the Pound Sterling (GBP). In the absence of top-tier UK economic data releases, the GBP/USD pair will be influenced by the USD. The release of preliminary US Gross Domestic Product (GDP) for the second quarter (Q2) will be in the spotlight. 

The majority of economists said in a Reuters poll that the BoE is expected to cut the bank rate to 5% at its August meeting next week. JP Morgan analyst, Allan Monks, noted that "we look for a 25 basis point rate cut at next week's meeting, although the call appears much closer than it did several weeks back. The case for lower rates is far from clear.”  

On the USD’s front, market players anticipate the US Federal Reserve (Fed) to keep rates unchanged at its July meeting next week, but forecast the US central bank to start easing its monetary policy in September, pushing the Federal Funds Rate to the 5.00%-5.25% range. 

However, investors will take more cues from the key US economic data this week for fresh impetus. On Wednesday, the release of US preliminary S&P Global PMIs for July could affirm the rate outlook. The Manufacturing PMI is projected to improve to 51.7 in July from 51.6 in June, while the Services PMI is forecast to ease slightly to 54.4 in July from 55.3. Later this week, the first reading of the US second-quarter Gross Domestic Product (GDP) and Personal Consumption Expenditures (PCE) Price Index data for June will be published.