GBP/USD gains ground near the 1.2800 barrier, BoE rate decision eyed

• GBP/USD trades strongly near 1.2797 amid the softer USD. 
• The Fed held interest rates steady as expected on Wednesday and hinted at multiple rate cuts before the end of the year.
• The BoE is widely expected to keep rates on hold at 5.25% on Thursday. 
• Traders await the BoE interest rate decision ahead of US S&P Global PMI data on Thursday.

The GBP/USD pair gains momentum during the early Asian trading hours on Thursday. The rebound of the pair is supported by the weaker US Dollar (USD) following Federal Reserve (Fed) Chair Powell's dovish press conference. Investors will closely watch the Bank of England (BoE) interest rate decision on Thursday, along with the preliminary US S&P Global PMI for March. At the press time, GBP/USD is trading at 1.2797, adding 0.09% on the day. 

The US Fed decided to keep its benchmark overnight borrowing rate in a range between 5.25% and 5.5% on Wednesday. Fed Chairman Jerome Powell did not indicate the timing of rate cuts, but he expected to lower the interest rate before the end of this year. According to the CME FedWatch Tool, futures markets have prices in  a 75% odds that the Fed will start cutting the rate in the June meeting.

The Fed's Powell noted that the recent high inflation reports had not changed the underlying story of slowly easing price pressures in the US, and Fed officials penciled in three quarter-percentage-point cuts by the end of 2024 as solid economic growth will continue. Additionally, the updated economic projections revealed the Personal Consumption Expenditures Price Index, excluding food and energy (Core PCE), will rise 2.6% by the end of the year, compared to 2.4% in the projections reported in December.

On the UK’s front, The BoE is anticipated to maintain its interest rates unchanged at 5.25% on Thursday. The CPI inflation data in February might keep the Bank of England (BoE) on course to begin cutting interest rates in the coming months. Data released on Wednesday showed that the Consumer Price Index (CPI) climbed by 3.4% YoY in February from a 4.0% rise in January, below the market consensus of 3.6%. This figure registered the weakest rate since September 2021. Meanwhile, the Core CPI, eased to 4.5% YoY in February from 5.1% in January, worse than the estimation of 4.6%. 

Moving on, market players will closely watch the BoE interest rate decision, along with the preliminary UK S&P Global PMI for March. On the US docket, the US S&P Global PMI, the weekly Initial Jobless Claims, and Existing Home Sales will be due. These events could give a clear direction to the GBP/USD pair.