GBP/USD marches towards 1.2300 on hawkish BOE concerns, softer US Dollar ahead of key data, Fed – Crypto News – Crypto News
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GBP/USD rallies sharply, above 1.1860 on mixed US/UK PMIs GBP/USD rallies sharply, above 1.1860 on mixed US/UK PMIs

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GBP/USD marches towards 1.2300 on hawkish BOE concerns, softer US Dollar ahead of key data, Fed – Crypto News

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  • GBP/USD rises for the third consecutive day despite mixed markets.
  • BOE is expected to announce a 50 bps rate hike as rents rise more than wages.
  • Easing of financial services rules for London adds strength to the Cable pair’s run-up.
  • US consumer-centric data eyed ahead of next week’s key Fed, BOE meetings.

GBP/USD stays on the front foot for the third consecutive day during early, despite the latest retreat from the intraday high surrounding 1.2270. In doing so cables The pair braces for the Bank of England’s (BOE) hawkish move during its next week’s monetary policy. Also favoring the quote buyers could be the overall weakness in the US Dollar amid recently downbeat US Treasury yields and softer data.

Late on Thursday, Bloomberg came out with an update suggesting a sharper rise in rents than wages in Britain. “Britons moving into a rental property have seen prices soar at twice the pace of wages in the past year, with no sign that the red-hot market will slow down soon. The cost of a new rental agreement rose 12.1% in the 12 months to October, according to a report from property portal Zoopla. That compares to 6% annual growth in earnings in the three months through September,” the news stated. Following Bloomberg’s news, a Reuters poll stated that the Bank of England will add another 50 basis points to the Bank Rate next week and take borrowing costs to 3.50%, despite the economy falling into recession, as it battles inflation running at more than five times its target.

Additionally, the Financial Times (FT) update suggesting more favor for the City of London also seemed to have propelled the GBP/USD prices. “(UK Chancellor) Jeremy Hunt will redraw the financial services rule book on Friday, including casting aside some safeguards designed to avoid a repeat of the 2008 crash, in an attempt to boost the City of London as a driver of growth,” stated the FT. .

On the other hand, the US Dollar Index (DXY) prints a three-day downtrend as traders brace for next week’s busy schedule comprising the Federal Reserve (Fed) monetary policy meeting and the inflation data, not to forget today’s consumer-centric figures. In doing so, the greenback’s gauge versus the six major currencies fails to track the recovery in the US Treasury bond yields while justifying the downbeat US data.

That said, US Initial Jobless Claims matched the 230K market consensus for the week ended December 02, versus the upwardly revised 226K prior. Further, the four-week average also printed 230K figure compared to 229K previous reading. Earlier in the week, the US Goods and Services Trade Balance deteriorated to $-78.2 billion versus $-79.1 billion expected and $-73.28 billion prior. Furthermore, the final reading of the Unit Labor for Q3 eased to 2.4% QoQ versus 3.5% first estimates.

It should be noted that the greenback’s latest losses fail to cheer the challenges to the sentiment amid fears surrounding Russia and China as the US braces for human rights sanctions on both these nations, per the Wall Street Journal (WSJ). The risk-negative news jostles with the headlines suggesting China’s interest in rebuilding ties with the US and easing the Zero-Covid policy to confuse traders.

Against this backdrop, S&P 500 Futures and the US Treasury bond yields remain pressured at the latest whereas commodities and Antipodeans cheer the softer US Dollar.

Moving on, the preliminary readings of the Michigan Consumer Sentiment Index for December, expected 53.3 versus 56.8 prior. Also important to watch will be the University of Michigan’s (UoM) 5-year Consumer Inflation Expectations for the said month, 3.0% from previous readings. Above all, the next week’s monetary policy meetings of the Federal Open Market Committee (FOMC) and the BOE Monetary Policy Committee (MPC) will be crucial for the cable pair to observe for clear directions.

technical analysis

A sustained bounce off the 10-DMA joins firmer oscillators to keep the GBP/USD buyers hopeful of refreshing the monthly high, currently around 1.2345. That said, a convergence of the stated DMA and the one-month-old ascending trend line restricts the short-term GBP/USD downside near 1.2150.

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