GBP/USD gains ground above the 1.2760 area, investors await UK Retail Sales

• GBP/USD holds positive ground above 1.2760, supported by the UK inflation data. 
• The core Consumer Price Index (CPI) data fuels concerns about stubborn inflation in the UK economy.
• US Initial Jobless Claims were marginally better than anticipated; the Philadelphia Fed Manufacturing Index improves.
• Investors will monitor the highly-anticipated UK Retail Sales on Friday.

The GBP/USD pair gains momentum and surges above mid-1.2750s during the early Asian session on Friday. The major pair currently trades near 1.2761, up 0.11% for the day. The strengthening of the Pound Sterling is bolstered by the inflation report and the probability of further interest rates by the Bank of England (BoE).

On Wednesday, the UK’s National Statistics revealed that the nation's Consumer Price Index (CPI) MoM came in at -0.4%, beating market estimation of -0.5% versus the previous reading of 0.1%. The annual British CPI inflation rose 6.8% for June, as expected at 6.8%. The core CPI, which excludes volatile oil and food prices for July, increased by 6.9%, above the estimated 6.8%. 

The core CPI data has raised concerns about persistent inflation in the UK economy, which may lead the BoE to keep raising interest rates. This, in turn, supports the Pound Sterling and acts as a tailwind for the GBP/USD pair. 

The number of unemployment claims fell for the week ending on August 12, indicating that the labor market remains tight. The figures strengthen the case for another interest rate rise by the Federal Reserve (Fed). FOMC Minutes emphasized on Wednesday that inflation remained unacceptably high and it may need additional tightening of monetary policy to bring inflation to the longer-run target.

That said, the number of jobless claims declined to 239K for the week ending on August 12. The figure came in slightly below the market expectation of 240K, the US Bureau of Labour Statistics (BLS) reported on Thursday. Meanwhile, the Continuing Jobless Claims rose to 1.716 million. Finally, the Philadelphia Federal Reserve's Manufacturing Survey for August improved to 12, above the market consensus of -10 and -12 prior. 

The UK Retail Sales data will be the key event on Friday. The monthly figure for July is expected to drop by 0.5%. Next week, market players will shift their focus to the Purchasing managers' indexes (PMI) data from both UK and US. Investors will take cues from the data and find opportunities around the GBP/USD pair.