GBPUSD retains small gains, but below a multi-week high

The GBPUSD pair struggles to consolidate on its small intraday bullish advance, giving up some of the early gains to reach the highest level since February 14 this Monday. For the first part of the European session. The pair trades close below the 1.2200 level, being at the mercy of the price dynamics of the US Dollar (USD).

The safe-haven Dollar gains from the risk-off atmosphere, while the pair suffers from it.

The widespread risk-off mentality, as shown by a softer tone in the stock markets. Draws some refuge flows to the US dollar and serves as a headwind for the GBPUSD pair. Notwithstanding recent emergency liquidity measures and multibillion-dollar lifelines for struggling US and European banks. Market investors remain anxious about the prospect of contagion and a  global financial catastrophe. This, in turn, adds to the weight. impact market sentiment and helps classic safe-haven assets such as the US dollar.

Nonetheless, the continuous decline in US Treasury bond rates, together with decreased prospects of a more aggressive Fed policy tightening. Sets a lid on  USD gains and continues to support the GBPUSD pair.

Investors appear to be confident that the US Federal Reserve would modify its hawkish tone especially in light of the recent failures of two mid-sized American banks, Silicon Valley Bank and Signature Bank. This, together with the anti-risk flow, causes a further rapid decrease in US Treasury bond rates, perhaps capping the USD.

Traders are hesitant to put bold wagers ahead of the Fed and the Bank of England this week.

Traders are hesitant to put aggressive wagers and may opt to remain on the sidelines ahead of this week’s market. Risks associated with major central bank events. The Fed is slated to announce its decision on Wednesday. at the conclusion of a two-day monetary policy meeting, and is largely expected to give a lower 25-basis-point rate boost amid weakening economic prospects.

The Bank of England (BoE) meeting on Thursday could offer some major momentum to the GBPUSD pair and assist define the next leg of a directional move.