GBP/USD has remained relatively neutral and unchanged over the last 24 hours. The pair floated just above the three-week low of 1.3055 for the majority of yesterday afternoon and has held tight into this morning’s trading session. The majority of the recent strength for USD has come in the form of the Federal Reserve’s hawkish tones around future rate hikes. Market consensus is that of a 100-basis point (1%) further hike over the next two meets in an effort to curb ever rising inflation, which currently sitting at 7.9% (12 months ended February 2022).
Peace talks in Ukraine seem to be dwindling which is pushing more and more investors towards USD as a safe-haven and in turn providing further support for the dollar. This could be a difficult period for UK importers purchasing goods from the US and Asia, with many speculating that GBP/USD will dip below the key 1.3000 mark in the coming weeks.
A quiet day in the calendar ahead will see investors look to the headlines for further indication of volatility throughout the afternoon.
Have a good day.
James Camp, Senior Relationship Manager.
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