GBP/USD attracts bets to near yearly lows at 1.3000, focus shifts on BOE’s Bailey

• GBP/USD rebounds firmly after testing the yearly lows at 1.2987.
• The dictations from Fed’s Powell and BOE’s Bailey are the major events this week to watch out for.
• The DXY has faced strong barricades near 101.00.

The GBP/USD pair is scaling higher sharply after sensing significant bids to near the psychological support of 1.3000. The cable has been strengthened amid weakness in the US dollar index (DXY). The DXY has plunged in the Asian session after failing to sustain above the round level resistance of 101.00. It seems like a rebound in the Wall Street has eased some volatility, which arise due to higher expectations of a mega rate hike by the Federal Reserve (Fed).

Also, investors have poured liquidity into the cable as the market participants are awaiting the speech from the Bank of England (BOE)’s Governor Andrew Bailey, which is due on Thursday. Investors are expecting a tad more hawkish guidance from BOE’s Bailey as higher inflation in the UK’s zone may compel a fourth consecutive rate hike by the BOE in May.

Meanwhile, the speech from the Federal Reserve (Fed)’s Chair Jerome Powell will be the major event this week. The market participants are bracing an aggressive hawkish stance from Fed’s Powell led by hawkish comments from other Fed policymakers. St. Louis Fed President James Ballard in his speech on Monday opened doors for a 75 basis point (bps) interest rate hike in May. Also, he sees the interest rates beyond the neutral rates at 3.5% by the end of this year. The 10-year US Treasury yields have eased a little after failing to claim 3%.