GBP/USD rebounds sharply from 1.3000 on de-escalation in the Russia-Ukraine war

• GBP/USD has spiked from 1.3000 amid positive cues on the Russia-Ukraine peace talks.
• A bearish open gap by the DXY below 100.00 has underpinned the pound.
• UK’s Industrial Production and Manufacturing Production will remain the major events on Monday.

The GBP/USD pair has attracted some significant bids to nearly 1.3000 amid optimism over a ceasefire between Russia and Ukraine. The comments from the Kremlin on Friday that Russia's special operation in Ukraine could be completed in foreseeable future given aims are being achieved and work is being carried out by the military and peace negotiators," as per Reuters have triggered a sense of optimism in the cable.

After Moscow ceases to be a member of the United Nations (UN) Human Rights Council, a sense of isolation in Russia is elevating fears of financial instability for a prolonged period in their region. 93 out of 175 members of the UN Human Rights Council favored the removal of Russia from the membership after Ukraine President Volodymyr Zelenskyy accused Russia of war crimes in the largest part of Kyiv. This has also exerted pressure on those countries to remain hawkish towards Russia, which chose a neutral stance on the latter.

Meanwhile, the US dollar index (DXY) has displayed a bearish open on Monday amid positive market sentiment. The DXY has tumbled below the psychological figure of 100.00 and is likely to be gripped in volatility ahead of the US Consumer Price Index (CPI), which will release on Tuesday. The street is estimating a print of 8.3% against the prior figure of 7.9%.  This may elevate the expectation of a 50 basis point (bps) interest rate decision by the Federal Reserve (Fed).

While the UK’s docket will report Industrial Production and Manufacturing Production on Monday. The yearly Industrial Production and Manufacturing Production are likely to land at 1.4% and 2.5% respectively.