GBP/USD stands firm near multi-month peak, just below mid-1.2900s on weaker USD

GBP/USD attracts some follow-through buying on Monday amid a bearish US Dollar.

Bets that the Fed will cut rates multiple times in 2025 continue to weigh on the buck.

Expectations for a slow BoE rate-cutting cycle underpin the GBP and support the pair. 

The GBP/USD pair kicks off the new week on a positive move and trades around the 1.2940-1.2945 region during the Asian session, or a four-month high touched on Friday. Moreover, the bearish sentiment surrounding the US Dollar (USD) supports prospects for an extension of last week's breakout momentum above the very important 200-day Simple Moving Average (SMA). 

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, hangs near its lowest level since early November touched in reaction to weaker US monthly employment details on Friday. The headline Nonfarm Payrolls (NFP) print showed that the US economy added 151K jobs in February, less than consensus estimates. Adding to this, the previous month's reading was revised down to 125K and the Unemployment Rate unexpectedly edged higher to 4.1% from 4.0% in January. 

This comes on top of worries that US President Donald Trump's policies will hit economic activity in the US and suggests that the Federal Reserve (Fed) remains on track to cut interest rates multiple times this year. The markets are currently pricing in about three rate cuts of 25 bps each this year, which continues to weigh on the buck and supports the GBP/USD pair. The USD bulls failed to gain any respite from Fed Chair Jerome Powell's comments that the US central bank is in no rush to cut rates. 

The British Pound (GBP), on the other hand, is underpinned by expectations that the Bank of England (BoE) will cut rates more slowly than other central banks, including the Fed. This turns out to be another factor that contributes to the bid tone around the GBP/USD pair and validates the positive outlook. In the absence of any relevant market-moving economic releases, either from the UK or the US, the USD will continue to influence spot prices and allow traders to grab short-term opportunities.