GBP/USD whipsawed on Thursday, falling to the day's low 1.2446 after a dovishly interpreted BoE decision to hold rates steady, then rallying toward 1.25 after above-forecast U.S. jobless claims, leaving sterling in a cautiously negative trend as traders await U.S. and UK inflation reports in the next two weeks.

An unexpected increase in the number of MPC members voting for a rate cut -- with Deputy Governor Dave Ramsden joining Swati Dhingra -- produced the dovish impetus.

That heaped downward pressure on GBP/USD before the jobless claims brought the pound some relief, with traders now awaiting the U.S. CPI report on May 15 and UK inflation data on May 22.

The dovish BoE hold initially lifted BoE June cut odds, as expressed on LSEG's IRPR page, to near 60%, before falling back to 45%, which facilitated cable's rise off session lows to 1.2500.

Considering the steady GBP/USD fall in the past week from Friday's post-payrolls high at 1.2634, recent shorts may lighten positions ahead of the weekend.

However, any combination of CPI reports that hints at a widening of U.S.-UK rate spreads is likely to reignite bearish GBP/USD tones, putting the April 22 2024 low at 1.2299 in focus.

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