GBP/USD continues to stick around 1.3100 as investors await BOE Bailey’s speech

• GBP/USD is oscillating in a range of 0.3051-0.3183 ahead of the speech from BOE’ Bailey.
• The progress on ceasefire hopes between Russia and Ukraine will underpin the risk-perceived currencies.
• Record lowest US Unemployment Rate has firmed the odds of an aggressive interest rate hike from the Fed.

The GBP/USD has continued to trade lackluster around 1.3100 amid the absence of a fresh trigger that could dictate a direction in the asset. The cable has traded in a range of 0.3051-0.3183 last week but is likely to find direction this week as investors are waiting for the speech from Bank of England (BOJ)’s Governor Andrew Bailey, which will provide insights into the likely monetary policy action in May. Apart from that, the peace talks round between Russian leader Vladimir Putin and Ukraine’s President Volodymyr Zelensky after the development of a specific written document will assert pressure on the cable.

To tame inflation, the BOE has already shifted the burden to the economy by raising the interest rates to 75 basis points. The print of the yearly UK’s Consumer Price Index (CPI) at 6.2% is signaling one more rate hike from the BOE. Meanwhile, positive cues from the Russia-Ukraine peace talks are likely to underpin the pound against the greenback as US Blinken says western sanctions may be lifted from Russia depending on the outcome of negotiations between Russia and Ukraine.

The US dollar index (DXY) is approaching 99.00 amid the lowest US Unemployment Rate since February 2020. The US Bureau of Labor Statistics has reported the Unemployment Rate at 3.6% lower than the estimate of 3.7% and the previous figure of 3.8%. It would not be incorrect to claim that the US economy has reclaimed its pre-Covid-19 levels of unemployment numbers. This has firmed the odds of a jumbo interest rate hike by the Federal Reserve (Fed) next month.