GBP/USD drifts higher above 1.3300 on softer US Dollar, upbeat UK GDP data

• GBP/USD attracts some buyers to near 1.3310 in Friday's Asian session.
• US PPI unexpectedly fell in April.
• Better-than-expected UK GDP data diminishes hopes of aggressive monetary policy easing by the BoE.  

The GBP/USD pair edges higher to around 1.3310 during the Asian trading hours on Friday. The Greenback weakens against the Pound Sterling (GBP) as downside surprises in the US economic data this week raise bets of more Federal Reserve (Fed) rate cuts this year. Traders will keep an eye on the preliminary University of Michigan Consumer Sentiment Index, along with the US Building Permits, Housing Starts, which are due later on Friday. 

US producer prices unexpectedly declined in April as the cost of services fell by the most since 2009. The Bureau of Labor Statistics on Thursday revealed that the US Producer Price Index (PPI) rose 2.4% YoY in April versus 2.7% prior. This figure came in weaker than the market expectation of 2.5%. Additionally, the US Initial Jobless Claims for the week ending May 10 came in at 229K, compared to the previous week of 229K (revised from 228K). This reading matched initial estimates. 

Swap markets have priced in the Fed's first 25 basis points (bps) rate cut for the September meeting, and they expect two additional rate reductions towards the end of the year. Some analysts believe policymakers could wait until December.

The upbeat UK Gross Domestic Product (GDP) data indicated strong economic health in the UK, which dampens hopes of aggressive monetary policy easing by the Bank of England (BoE). This, in turn, provides some support to the GBP against the USD. The Office for National Statistics reported on Thursday that UK economy showed strong growth in the first quarter of 2025, rising by 0.7% QoQ. The figure came in better than the 0.6% expected.