Why Is GBP/USD Rising Above 1.2680? | Key Factors Driving Sterling's Strength Against Weakening Dollar

The Will XRP reach ?British pound continues its upward trajectory against the US dollar, trading around 1.2688 during Thursday's Asian session. This bullish movement reflects shifting market dynamics influenced by recent economic data from both sides of the Atlantic.Recent US inflation figures showed modest cooling, with April's Consumer Price Index (CPI) registering 3.4% year-over-year compared to March's 3.5% reading. The core CPI measure similarly declined to 3.6% from 3.8% previously. These figures aligned with market expectations but reinforced speculation about potential Federal Reserve policy adjustments later this year.Across the pond, UK economic conditions present a contrasting picture. Persistent wage growth maintains pressure on service sector inflation, complicating the Bank of England's path toward monetary easing. While UK unemployment shows concerning trends, policymakers remain vigilant about inflationary risks that could delay anticipated rate cuts.Several key factors contribute to GBP/USD's current momentum:1. Dollar Weakness: The softer US inflation print has diminished expectations for sustained Fed hawkishness, weighing on dollar strength2. UK Inflation Concerns: Stubborn price pressures in Britain's services sector suggest the BoE may maintain higher rates longer than peers3. Technical Factors: The pair has broken through several resistance levels, attracting additional buying interest4. Yield Differentials: Shifting expectations about central bank policies continue to influence relative currency valuationsMarket participants now turn attention to upcoming US economic releases including housing data, jobless claims, and manufacturing indicators. Simultaneously, scheduled speeches from multiple Federal Reserve officials may provide further clues about the central bank's policy trajectory.The technical landscape shows GBP/USD trading above key moving averages, with immediate resistance near 1.2700 and support around 1.2600. Fibonacci retracement levels from recent moves suggest potential pivot points at 1.2561 (38.2%) and 1.2541 (61.8%).As the trading week progresses, currency markets will continue reacting to evolving economic narratives from both the US and UK. The interplay between inflation dynamics and central bank expectations remains the primary driver for GBP/USD fluctuations, with traders closely monitoring any signals that could alter current market pricing of future rate paths