GBP/USD defends 1.2100 as skepticism for Fed policy escalates
- GBP/USD has managed to sustain its auction above 1.2100 as investors are mixed for Fed policy.
- The odds of a 50 bps rate hike by the Fed have vanished as January’s renewed price pressures were a one-time blip.
- UK FM announced a tax-free pension allowance so that individuals don’t consider early-age retirement.
The GBP/USD pair has sensed a buying interest after a corrective move to near 1.2100 in the early Asian session. The Cable is attempting to extend further above the immediate resistance of 1.2130 as investors are getting anxious for mixed views on Federal Reserve’s (Fed) monetary policy outlook, scheduled for next week.
S&P500 futures ended Thursday’s trading session on a promising note as various financial institutions came forward to provide liquidity into the US-based First Republic Bank and the Swiss National Bank (SNB) infused a new lifeline into Credit Suisse, portraying an improvement in investors’ risk appetite. The US Dollar Index (DXY) is hovering near 104.40 as investors are skeptical about the interest rate decision by the Federal Reserve (Fed), which will be announced next week.
The odds of a 50 basis point (bps) interest rate hike by the Fed have almost vanished as the continuous decline in the United States economic data for February month has confirmed that January renewed inflationary pressures were a one-time blip. Therefore, investors are mixed about an unchanged policy stance as the banking crisis is deepening dramatically or a 25 bps rate hike as Fed chair Jerome Powell is required to continue to weigh pressure on the US Consumer Price Index (CPI).
On the Pound Sterling front, the Office for National Statistics (ONS) reported a 3% jump in job advertisements for the week ending March 10. The scale of addition in job adverts was 19% lower than the figure recorded a year ago.
The United Kingdom's economy is facing the problem of a shortage of labor, which is getting offset by higher offerings from firms. To tame the labor shortage, UK Finance Minister (FM) Jeremy Hunt has already announced a tax-free pension allowance so that individuals don’t consider early-age retirements.