Fundamental Overview

GBP/USD came under bearish pressure during the American trading hours on Friday and broke below 1.2400, closing the week in negative territory. The pair holds steady above 1.2350 early Monday but struggles to gather recovery momentum despite the positive shift seen in market mood.

Bank of England (BoE) Deputy Governor Dave Ramsden said on Friday that risks to persistence in domestic inflation pressures were receding. When asked about the Federal Reserve's rate outlook, Ramsden said some of the fundamentals of US growth dynamics were different from the UK's and noted that they will do what makes sense in terms of their own mandate.

These comments could suggest that the BoE is unlikely to delay a policy pivot even if the Fed opts to leave the policy rate unchanged in June.

The economic calendar will not offer any high-tier data releases on Monday. Preliminary Services and Manufacturing PMI data for April, both from the UK and the US, will be watched closely by market participants on Tuesday.

Meanwhile, the UK's FTSE 100 is up more than 1% on the day and US stock index futures trade in positive territory. In case risk flows continue to dominate the financial markets in the second half of the day, GBP/USD could find support.