UK pound slumped to a fresh two and half month low against the dollar on Friday as greenback extends upside amid reducing bets of a near term interest rate cut by the US Fed. The US Personal Consumption Expenditure (PCE) Price Index report suggested that price pressures would increase in the second half of 2025 and delay the US Fed interest rate cuts. PCE inflation accelerated to 2.6% on year, outrunning the expected hold at 2.5%. Market sentiments also remained cautious after US President Donald Trump imposed higher tariff rates on US trading partners set to go into effect on August 1. Investors now shift their focus toward the US nonfarm payrolls, due later in the day. The dollar index that measures the greenback against a basket of currencies currently stands at 99.93 after having hit the 100 mark, during intraday moves. On the domestic docket, business activity in the UK manufacturing sector contracted more than previously thought, according to the final release of the S&P Global PMI reading, which was revised down to 48.0 from the previously estimated 48.2 reading. GBPUSD is currently trading lower by nearly half a percent on the day at $1.3167. Meanwhile, on the NSE, GBPINR fell 0.65% at 115.40.

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