GBP/USD clings to mild gains around 1.2150 heading into Friday’s London open. In doing so, the Cable pair remains firmer for the second consecutive day amid downbeat US Dollar, as well as due to the price-positive catalysts. It should be noted, however, that the cautious mood ahead of the next week’s key monetary policy meetings from the Bank of England (BoE) and the Federal Reserve (Fed), as well as the final voting on the Brexit verdict, keeps the Cable buyers chained.
The multi-month-old labor problems in the UK are likely to end soon as The Guardian said, “The government has confirmed it is making a significant new pay offer to National Health Services (NHS) staff in England, including a one-off bonus which unions say amounts to £2.5bn.” the news also adds that the Unions involved in the pay talks said further strikes by ambulance staff and other NHS workers had been suspended and they would recommend members accept the new offer.
Elsewhere, hopes of witnessing a sooner and positive end to the Brexit deadlock also allow the GBP/USD buyers to remain hopeful as The Telegraph said that the UK’s Members of the Parliament (MPs) will deliver their final verdict on Rishi Sunak’s new Brexit deal next week after Downing Street confirmed a vote on the Windsor Framework will be held on Wednesday.
Above all, the market’s cautious optimism and the US Dollar’s positioning for the next week’s Federal Open Market Committee (FOMC) monetary policy meeting seem to allow the GBP/USD buyers to keep the reins for the third consecutive week.
The mildly positive sentiment could be linked to the global policymakers’ and bankers’ efforts to avoid the return of 2008’s financial crisis, as well as comments from rating agencies suggesting no more challenges for the baking sector.
Against this backdrop, the S&P 500 Futures pick up bids to pare the intraday losses around 3,995, following an upbeat close of the Wall Street benchmarks, whereas the US Treasury bond yields fade the previous day’s corrective bounce off the monthly low.
Looking forward, the UK’s Consumer Inflation Expectations for March will precede the preliminary readings of the US Michigan Consumer Sentiment Index for March and the UoM 5-year Consumer Inflation Expectations for the said month to direct intraday GBP/USD moves ahead of the key week.
A clear rebound from the 21-DMA support, around 1.2025 by the press time, directs GBP/USD towards the monthly top surrounding 1.2200.
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