GBP/USD rebounds from YTD trough, steadily climbs back closer to 1.2400 mark

• GBP/USD attracts some dip-buyers on Monday amid a softer USD, though lacks follow-through.
• Easing geopolitical tensions boosts investors' confidence and undermines the safe-haven buck.
• Reduced Fed rate cut bets should help limit the USD losses and cap any further gains for the pair.

The GBP/USD pair stages a modest recovery from the 1.2365-1.2360 area, or its lowest level since November 14 touched during the Asian session on Monday and for now, seems to have snapped a two-day losing streak. The uptick is supported by a modest US Dollar (USD) downtick and lift spot prices back closer to the 1.2400 mark in the last hour, though any meaningful upside still seems elusive. 

Iran signaled that it has no plans to retaliate against the Israeli limited-scale missiles strike on Friday, easing fears about a further escalation of tensions in the Middle East. This, in turn, boosts investors' confidence, which, in turn, is seen undermining the safe-haven Greenback and acting as a tailwind for the GBP/USD pair. Meanwhile, expectations that the Federal Reserve (Fed) will keep rates higher for longer in the wake of still-sticky inflation in the US help limit the USD downside and might cap the major. 

Market participants have been pushing back their expectations about the likely timing when the Fed will start cutting rates to September and also downsizing their bets for the number of rate cuts this year. The hawkish outlook remains supportive of elevated US Treasury bond yields and acts as a tailwind for the buck. Apart from this, speculations about more aggressive policy easing by the Bank of England (BoE) might contribute to keeping a lid on any further appreciating move for the GBP/USD pair. 

There isn't any relevant market-moving economic data due for release on Monday, either from the UK or the US, leaving spot prices at the mercy of the USD price dynamics. The focus, meanwhile, will remain glued to this week's important US macro data - the Advance Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index on Thursday and Friday, respectively. Apart from this, the flash UK/US PMI prints might provide some meaningful impetus to the GBP/USD pair.