GBP/USD bulls dominate above 1.2400 as UK stimulus looms, US Dollar drops ahead of PMI, GDP data – Crypto News – Crypto News
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GBP/USD bulls dominate above 1.2400 as UK stimulus looms, US Dollar drops ahead of PMI, GDP data – Crypto News

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  • GBP/USD takes the bids to refresh intraday highs, up for the fifth consecutive day.
  • Expectations of UK stimulus bolster as British business push PM Sunak to act on growth reforms.
  • Hawkish Fed talks fail to underpin US Dollar rebound amid downbeat US data, expectations of soft landing.
  • First readings of January’s PMI, US Q4 GDP will be crucial for clear directions.

GBP/USD news intraday top near 1.2435 as Cable buyers cheer the broadly down US Dollar and hopes of stimulus from UK Prime Minister (PM) Rishi Sunak during early Monday. In doing so, the cables The pair rises for the fifth consecutive day while polling the key resistance line stretched from early December 2022.

Britain is falling behind its peers in the race to spur economic growth and Prime Minister Rishi Sunak must act now to boost investment, fix a lack of workers and avoid chaos over post-Brexit rules, Confederation of British Industry (CBI) Director-General Tony Danker said on Monday per Reuters. The news praised Sunak’s efforts to diffuse budget fears emanating from the previous government but marked the need for action to match the growth prospects of the US and European Union. The news also adds that Finance Minister Jeremy Hunt is expected to announce pro-growth measures in a budget statement in March. But Danker feared the government might temper its reforms as an election, expected in 2024, approaches.

It’s worth noting that the downbeat UK inflation and jobs report joined softer British Retail Sales to probe the hawkish concerns surrounding the Bank of England in the last week. However, the US statistics were also disappointing and joined the Fed policymakers’ inability to convince market hawks to expect higher rateswhich in turn weighed on the US Dollar.

That said, the US Dollar Index (DXY) drops 0.30% intraday to 101.65 by press time amid cautious optimism and the absence of the two-week ‘blackout period’ before the Fed meeting.

Federal Reserve Governor Christopher Waller was the last of the US central bank speakers to cross the wires as he said, “He favors a 25 basis point rate hike at the upcoming meeting and continued policy tightening beyond that.” However, the Wall Street Journal (WSJ) states that Federal Reserve officials are preparing to slow interest-rate increases for the second straight meeting and debate how much higher to raise them after gaining more confidence inflation will ease further this year.

Against this backdrop, the US Treasury bond yields remain depressed around the multi-day low while the stocks Futures print mild losses after the Wall Street benchmarks closed the week on a negative note.

Looking forward, the British financial calendar offers the first readings of January’s activity numbers and will be watched closely to gauge the need for more stimulus from Sunak. Also important will be the advanced readings of the US four-quarter (Q4) Gross Domestic Product (GDP).

technical analysis

As the RSI (14) is near the overbought territory, it does highlight a 1.5-month-old resistance line near 1.2435 as the key challenge for the GBP/USD bulls.

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