GBP/USD shoots above 1.3020 on higher than expected UK’s inflation at 7%

• GBP/USD is approaching 1.3030 on higher UK CPI and Retail Sales Index. 
• A UK’s inflation has raised the odds of one more interest rate hike by the BOE in May.
• Risk-on impulse is fetching the spotlight amid a rebound in the Asian markets.

The GBP/USD pair as the UK’s Office for National Statistics has reported the yearly Consumer Price Index (CPI) at 7%. A print of 7% is significantly higher than the preliminary forecast of 6.7% and the prior figure of 6.2%. However, the yearly Core CPI has landed at 5.7%.

This has raised the odds of an elevation in the interest rates by the Bank of England (BOE) in May.  Earlier, the BOE raised its interest rates to 0.75%. The BOE hiked its borrowing rate by 25 basis points (bps) twice in February and March and by 10 bps in December. In March’s monetary policy, BOE Governor Andrew Bailey announced that inflation is set to reach 8% in the month of April and the Ukraine crisis due to Russia’s invasion of Ukraine, which is bolstering the energy bills of households. Also, the higher commodity prices have dented the margins of corporate.

The yearly UK Retail Price Index has landed at 9%, higher than the previous figure and market consensus of 8.8% and 8.2% respectively.

Meanwhile, the US dollar index (DXY) is eyeing a re-test of the critical figure of 100.00 on improvement in the risk appetite of the market participants. Asian markets have rebounded sharply as fears of higher US inflation are fading away. Positive market sentiment is favoring the risk-sensitive assets.