GBP/USD attempts to defend 1.2300, market mood remains jittery on upbeat oil prices

• GBP/USD has rebounded in an attempt to defend the 1.2300 support.
• S&P500 futures have reported significant losses as higher oil prices would accelerate input costs.
• The Fed would look for raising rates further in May if inflation gets exploded with solid oil prices.

The GBP/USD pair is making efforts in defending its round-level support of 1.2300 in the Asian session. The Cable witnessed a sheer decline in the early Tokyo session as investors discounted the impact of higher oil prices after an announcement of further oil production cuts by OPEC+. A significant jump in the oil price has renewed fears of a rebound in inflationary pressures globally. Therefore, central banks might be required to continue higher rates for a lengthy period.

S&P500 futures have reported significant losses in the Asian session after a spree of bullish sessions last week as higher oil prices would accelerate input costs for firms banking on oil for transportation and manufacturing. The market sentiment has turned negative and risk-perceived assets have taken the bullet.

The US Dollar Index (DXY) is showing minor correction after printing a fresh weekly high at 102.95. The upside in the USD Index looks favored as renewed inflation hopes in the United States due to higher oil prices have faded the impact of the deceleration in the US core Personal Consumption Expenditure (PCE) Price Index data.

On a monthly basis, the US PCE Price Index accelerated by 0.3%, lower than the consensus of 0.4% and the former release of 0.5%. Also, the annual US PCE Inflation figure soften to 4.6% from the consensus and prior release of 4.7%.

The Federal Reserve (Fed) would look for raising rates further in May if inflation gets exploded with solid oil prices.

On the Pound Sterling front, rising inflationary pressures are creating more troubles for the Bank of England (BoE). United Kingdom’s shop price inflation has soared further as food prices are escalating further. Apart from that, shortages of labor continue to propel inflation expectations. However, BoE policymakers are confident that UK inflation will start declining quickly.