GBP/USD Probable to Be Driven By USD Dynamics

gbp/usd

GBP/USD is on course to snap a two-da losing streak thanks to a weaker dollar index and a broader risk-on sentiment. The European session saw a modest recovery for the greenback pushing the pair down 60-odd pips to trade sub 1.22000 as we approach the US session.

British Pound gains to start the week come as a bit of a surprise given the contrasting central bank messages last week. The US Federal Reserve being relatively hawkish while the Bank of England revealed a vote split, with two members voting for no rate hike. The news saw Sterling retreat from its 6-month against the greenback keeping the GBP down around 10% YTD against the US dollar. The hawkish outlook by the Fed should keep dollar bulls in play adding further downside pressure on GBP/USD

Meanwhile, this morning the UK Treasury confirmed that the next budget will be delivered on March 15, 2023. Chancellor Hunt has requested the Office for Budget Responsibility (OBR) to “prepare an economic and fiscal forecast which will be presented alongside the Spring Budget on 15 March 2023.”

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