GBP/USD marches towards 1.2400 as risk-on impulse rebounds, recession fears still weigh

• GBP/USD is advancing towards 1.2400 as the DXY eased intraday.
• Inflationary figures in the UK have climbed to 9%.
• The BOE is left with no other option than to hike its interest rates sooner.

The GBP/USD pair has attracted some significant bids near 1.2340 as a risk-on impulse has rebounded sharply and risk-perceived assets are gaining the limelight. The major is moving sharply higher and is expected to reach the round level resistance of 1.2400.

Earlier, the cable witnessed a sheer downside move on Wednesday after the UK’s Office for National Statistics reported the Consumer Price Index (CPI) figures. The annualized CPI figure landed at 9%, a little lower than the forecast of 9.1% but significantly higher than the previous figure of 7%. It won’t be wrong to claim that inflationary pressures are galloping and intervention of the Bank of England (BOE) is notably required to fix the inflation mess.

The core CPI that excludes food and energy prices has landed at 6.2%, similar to the consensus. Higher price pressures are dampening the real income of the households and the BOE is left with no other option than to continue interest rate elevation.

Meanwhile, the US dollar index (DXY) is going through a meaningful intraday fall after failing to cross the round level resistance of 104.00. The asset has displayed a bearish open test-drive session and is expected to record more losses. The odds of a spree of bumper rate hikes by the Federal Reserve (Fed) are rising higher. Philadelphia Fed Bank President Patrick Harker believes that the Fed should follow its tradition of elevating interest rates by 25 basis points (bps) after announcing two 50 bps rate hikes in June and July.