Noor Trends News, Technical Analysis, Educational Tools and Recommendations
The Pound Sterling advances against the US Dollar during the US trading session due to the market’s positive sentiment boosted by expectations that the US Federal Reserve would slowdown the pace of upcoming rate hikes.
This expectation comes during the week that will witness the key CPI data, inflation report in the United States. At the time of writing, the GBP/USD is trading at 1.2180 shortly after slightly sliding from 1.2205.
Economists suggest that UK political developments as well as the hawkish stance expressed by BoE’s officials contribute to boosting the GBP/USD pair.
Wall Street has opened with solid gains. Monday witnessed no ket US economic data, this is keeping investors and traders’ focus on the UK news.
UK’s Rishi Sunak said that inflation is not guaranteed to decline in 2022 and that the government would need to be disciplined to curb inflation. Regarding strikes and other themes, UK’s PM Sunak added that he was willing to discuss pay increases for nurses in an effort to finish strikes.
The Bank of England policymakers led by Catherine Mann said that energy price caps could bring inflation up in other sectors as it could boost consumer spending. She added that what would happen to inflation is unclear when lids are removed.
On Monday also, BoE’s Huw Pill said that the central bank would continue to act to reach the inflation target, saying that the Monetary Policy Committee (MPC) “will respond forcefully” if needed. Pill stated that domestic prices and wages are key to the MPC outlook.
After breaching the 200-day Exponential Moving Average (EMA), the GBP/USD closes toward the 1.2200 mark, printing a three-week new high. The twelve-day consolidation period appears to end, and if the GBP/USD clears the 1.2200 figure, that could pave the way for December’s 19 daily high of 1.2242, which, once cleared, could open the door for a rally to 1.2300.
