US Dollar Gets Weaker Amid British Hope
The GBP/USD currency pair is still firm in the vicinity of its two-week high. It extended the rebounds from the week before it while policymakers in Britain gave hope. They sounded hopes of prevailing over the woes of inflations and Brexit negotiations.
Another factor that kept buyers of the cable hopeful is the general weakness of the US Dollar. The Dollar is weak at the beginning of the new week that started lukewarmly. The pair to the daily bid to 1.2545 in the course of the Asian session.
GBP/USD price chart. Source TradingView
Both the UK Prime Minister and BOE Chief Economist made efforts to pacify GBP/USD buyers. Boris Johnson and Huw Pill shrugged off concerns that policymakers are out of fighting resources. They need more resources to fight fears coming from both Brexit and the Ukraine war.
The UK Prime Minister said in the coming months, the UK will do what it did before. He said the country is going to use the fiscal firepower that it built. As reported by Reuters, the Prime Minister said the country has to resort to that.
On another hand, Huw Pill of the BOE said that the bank will still go ahead with its tightening policy. Reuters reported over the weekend.
Meanwhile, there are mixed reactions to the COVID in China and different Federal Reserve Speeches. The Federal Reserve statements support a 50 basis points increase in interest. They also let the market consolidate all its initial losses.
The same conditions weigh heavily on the US Dollar as a safe-haven asset. It also pulled down the US Dollar index to a level of 102.70. The US Dollar index has gone down by 0.31% on the intraday.
Risk of Deal Cuts
Whereas, the conflict between the EU and the UK over the Northern Ireland Protocol continues. The agitation has spread with US House Speaker, Pelosi, warning Britain of no trade with the US. There could be a backlash against the UK on trans-Atlantic trades if it goes ahead.
According to the UK Daily Mail, Pelosi warned that there might be no Trans-Atlantic deal. The UK is currently risking the Good Friday Agreement.
While all these are on, the ten-year Treasury yields of the US have risen by some 2.5 basis points. This amounts to 2.81% while the S&P 500 futures increased by 1.0% to 3,940. It, therefore, prolonged its rebound from a year’s low point in the past week.
Going ahead, the Governor of the BOE, Andrew Bailey, is expected to speak in Vienna. He will be delivering a speech at the Oesterreichische National Bank Economic Conference.
Bailey is expected to speak on a topic relating to monetary policies, inflation, and pandemic. Therefore, there are possibilities that Bailey would address the latest clues given by Pill and Johnson. The speech is also expected to hold the GBP/USD currency pair in a firm place.