At the time of writing the GBP/USD was trading at around $1.2526, virtually unchanged from Friday’s opening levels.

The US Dollar (USD) started the week trading in a narrow range as an absence of market moving data saw the ‘Greenback’ struggle to find a clear direction.

However, on Wednesday, the US Dollar plunged against the majority of its peers following the publication of the latest US consumer price index (CPI).

The data came in softer than expected, with headline inflation unexpectedly easing from 3.4% to 3.3% in May, which served to undermine USD in the aftermath of the release.

On Thursday, the ‘Greenback’ tried to claw back some of its losses following the Federal Reserve’s latest interest rate decision later that evening.

Although the Fed implied that it will only enact one interest rate cut this year, the US Dollar still struggled to catch bids.

Moving into Thursday, an unexpected decline in US producer price inflation and a surprise rise in jobless claims seemed to have little effect on USD investors, as the American currency treaded water for the remainder of the week.

Pound (GBP) Quiet amid Limited Data

The Pound (GBP) began the week trending mostly flat against its peers as an absence of market moving data saw Sterling unable to find a clear trajectory.

However, on Tuesday, the Pound faced fresh selling pressure following an unexpected rise in UK unemployment in April.

However, despite the lackluster unemployment reading, a stronger-than-forecast wage growth reading served to limit Sterling’s losses.

Moving into mid-week trade, the Pound continued on the back foot following the publication of the UK’s latest GDP data.

The index revealed that the British economy stalled in April as expected, which saw GBP struggle to garner investor attention.

Moving to the end of the week, a continued lack of data saw GBP exchange rates continue to trade sideways, only marginally supported by deferred Bank of England (BoE) interest rate cut bets.

GBP/USD Exchange Rate Forecast: BoE Interest Rate Decision in the Spotlight

Looking ahead, the primary driver of movement for the Pound US Dollar exchange rate this week is likely to be the Bank of England’s upcoming interest rate decision, scheduled for release on Thursday.

As the BoE is widely expected to keep rates unchanged during its June meeting, investor attention will likely turn to the central banks accompanying forward guidance.

Any hints on when the BoE is planning to enact its first rate cut of the year will likely infuse volatility into GBP exchange rates.

Turning to the US Dollar, market moving data will be few and far between next week, however, on Tuesday, the US will release its latest retail sales data.

The data is forecast to marginally rise for May’s reading, expected to increase from 0% to 0.3%. Should the data print as expected, this could offer the USD some modest support moving into mid-week trade.