GBP/USD Steps Back From 1.3080 as Dollar Index Gets Weaker While Risk Appetite Improves
Attracting More Investments
The GBP/USD currency pair once again attracted a good measure of bids close to the 1.3080 area while investors’ risk appetite improved and perceived risk assets begin to gain a lot more demand in the market. In the early hours of trade opening, the cable pair started off with underperformance in spite of the stiff monetary policy implementation by the Bank of England.
GBP/USD Price Chart. Source TradingView
The Bank of England went ahead to increase its interest rate to 75 basis points to fight the rapidly increasing inflation. The British apex bank has increased its marked rate up to three times in quick succession, raising it by 25 basis points on each occasion. In addition to that, the United Kingdom’s Office on National Statistics published the annual consumer price index which came in at 6.2%, a point that was spectacularly higher than all initial estimations carried out by the market and also higher than the first set of figures that were 5.9% and 5.5% in that order.
A possible higher inflation figure in the United Kingdom might cause the Bank of England to step up its game and introduce another increase in interest rates by May.
The United States dollar index that has been keeping a close track of events in relation to the US dollar and other competing currencies is facing obstacles after it failed to secure a new nine-months high point, and it is presently on the edge of falling sharply under the 99.00 area.
The Cost of Diplomacy
The risk appetite improvement that was observed after three major demands of Russia were made to wit, the demilitarization of Ukraine, the denazification, and the lawful protection for Russian as a language in Ukraine have all pushed the US dollar index down close to 99.30.
Whereas, the ten-year US Treasury bond yields are rotating in the vicinity of 2.46% as the market waits for the US Non-farm payroll records which are scheduled to be published on Friday. The first estimation of the US Non-farm payroll standing at 475,000 gives signs of a major reduction in relation to the prints that came before it at 678,000.
Aside from the Non-farm payroll records expected, investors might be focusing on also on the quarterly and annual United Kingdom GDP figures due to be published on Thursday. The quarterly and annual GDP figures might possibly hit 1% and 6.5% in that order.