GBPUSD surges to a nearly two-month high. as the dollar falls. A break above the mid-1.2300s supports bulls in the face of a positive fundamental background.
GBP recoups intraday low of 1.2300 mark
During the first half of the European session on Thursday. The GBPUSD duo recovers an intraday drop to the sub-1.2300 range and rises to its highest point since early Feb. The duo is presently trading close to the mid-1.2300s. And appears set to extend its recent upward move from the 1.1800 mark, or the YTD bottom reached earlier in this month.
The worldwide risk perceptions remain backed by easing worries about the banking sector. This is viewed as eroding the safe-haven US Dollar and becoming a key factor driving the GBPUSD duo high. The takeover of SVB by First Citizens Bank & Trust Company calmed market concerns about the danger of contagion.
In addition, the reality is that no new gaps have appeared in the banking industry in the past two weeks. Indicates that a widespread banking crisis may have been avoided. Recent events keep on reinforcing investor confidence and driving flows off from traditional safe-haven currencies such as the US dollar.
GBPUSD gains support from BoE hawkish statements
The Sterling, on the contrary, gets backing due to more bullish comments by (BoE) Governor Andrew Bailey. Who says that if there are indications of ongoing rising inflation, interest rates may have to rise?
Economic Activity Schedule
In addition, Bailey informed the House of Commons Treasury Select Committee on Tuesday that the UK banking apparatus is in good shape. And is not under duress as a result of global financial instability. This, in turn, raised the chances of the BoE raising interest rates further, which persists to serve as a boost for the Pound and supports the GBPUSD pair’s robust rise.
Technical Outlook
Spot prices appear to have overcome an obstacle near the 1.2345-50 region. That favors bullish buyers and supports chances for yet another near-term gaining move.
However, the absence of significant follow-up buying suggests a bit of caution ahead of Friday’s release of the US Core PCE Price Index. Meanwhile, markets will turn to the US economic docket on Thursday. Which includes the final Q4 GDP report and the weekly initial jobless claims. This, together with wider risk attitudes could impact USD price trends and give a push to the GBPUSD duo.
