GBP/USD retreats from its highest level since March 2022, slips below 1.3400 mark

• GBP/USD attracts some sellers on Friday and is pressured by a modest USD strength.
• Bets for another oversized Fed rate cut in November should cap gains for the buck.
• A relatively hawkish BoE expectations should contribute to limiting losses for the pair.

The GBP/USD pair drifts lower during the Asian session on Friday and moves away from its highest levels since March 2022, around the 1.3435 region touched the previous day. Spot prices slide below the 1.3400 mark in the last hour amid a modest US Dollar (USD) uptick, though any meaningful corrective decline still seems elusive. 

The Greenback attracts some buyers and reverses a part of the previous day's losses amid some repositioning trade ahead of the crucial US inflation data - the Personal Consumption Expenditure (PCE) Price Index due later today. In the meantime, rising bets for a more aggressive policy easing by the Federal Reserve (Fed), along with the upbeat market mood, should cap the upside for the safe-haven buck. 

Despite the fact that several Federal Reserve (Fed) officials this week tried to push back against bets for a more aggressive policy easing, the markets are pricing in a greater chance of another oversized rate cut in November. This overshadowed Thursday's better-than-expected US macro data and should hold back the USD bulls from placing fresh bets, which, in turn, should lend support to the GBP/USD pair. 

Meanwhile, the global risk sentiment remains supported by hopes that interest rate cuts will boost global economic activity. Adding to this, a slew of stimulus measures from the People's Bank of China (PBOC), including Friday's announcement to cut the seven-day repo rate to 1.5% from 1.7% and lower the Reserve Requirement Ratio (RRR) by 50 bps, further boosts investors' appetite for riskier assets.

Furthermore, expectations that the Bank of England's (BoE) rate-cutting cycle is likely to be slower than in the United States (US) should continue to underpin the British Pound (GBP) and contribute to limiting losses for the GBP/USD pair. This makes it prudent to wait for strong follow-through selling before confirming a near-term top for the major, which remains on track to end the week on a positive note.