GBP/USD slips below 1.2300 on souring market mood, Fed Powell eyed

• GBP/USD has tumbled below 1.2300 as the negative market mood has trimmed the risk appetite.
• The DXY has climbed above 104.00 and is expected to balance above the same.
• The BOE is unable to explore more tightening measures amid lower GDP and higher unemployment.

The GBP/USD pair is scaling gradually lower after failing to sustain above the critical hurdle of 1.2400 on Thursday.  The asset has recorded an intraday low of 1.2286 and is expected to slip further as the risk-off impulse has rebounded sharply and investors are underpinning the safe-haven assets.

A rebound in the negative market sentiment has fetched significant bids for the US dollar index (DXY). The DXY is auctioning above 104.00 and is expected to extend its gains towards the psychological resistance of 105.00. The Federal Reserve (Fed) has announced a rate hike by 75 basis points (bps) on Wednesday and considering the momentum in the inflation parameter, investors should brace for more rate hikes going forward.

In today’s session, the speech from Fed chair Jerome Powell is on the radar. Fed Powell is expected to dictate the roadmap of more rate hike announcements and other measures to fix the inflation mess.

On the pound front, pound bulls are expected to perform lackluster on a broader note. The Bank of England (BOE) has accelerated the rate cycle by 25 bps and its interest rates have reached to 1.25%.

The downbeat Gross Domestic Product (GDP) and higher Unemployment Rate released this week restricted the BOE to explore extreme policy tightening measures. Considering the annual inflation figure of 9.1%, the BOE has to paddle up its interest rates swiftly.