GBP/USD bulls move in and look towards 1.2320
- GBP/USD moves higher in Asia in a risk-on setting.
- MPC will not be swayed by the concerns about the health of the global banking sector.
GBP/USD is bid in Asia printing fresh corrective highs to 1.2317 and up 0.2% at the time of writing. Investors sought clarity on the fallout from the recent collapse of two US lenders and the rescue of Credit Suisse while central bank sentiment simmers on the backburners.
The dollar index, DXY, which measures the currency against six rivals, was lower on the day and is extending the offer in Asia on Tuesday near the 7-week low of 101.91 touched on Thursday. Last week, the US Federal Reserve raised interest rates by 25 basis points, as expected, but took a cautious stance on the outlook because of the banking sector crisis. Markets are now pricing in around a 55% chance of the Fed standing pat on interest rates in its next meeting in May and anticipate a pivot as early as July.
Domestically, the British Pound Sterling was bid on the back of the Bank of England Governor Andrew Bailey signaling that interest rate-setters would focus on fighting inflation and would not be swayed by the concerns about the health of the global banking sector. Data released earlier Monday showed that UK Retail Sales conditions from the Confederation of British Industry declined modestly in March.