- GBP/USD has marked a three-month high at 1.2733 on Wednesday.
- BoE Governor Andrew Bailey is committed to taking necessary measures to bring inflation down to its 2.0% target.
- US Dollar Index is indecisive on the mixed remarks by Federal Reserve (Fed) members.
GBP/USD struggles to continue its winning streak that began on November 23, treading water around 1.2700 during the Asian session on Thursday. However, the GBP/USD pair marked a three-month high at 1.2733 on Wednesday on a softer US Dollar (USD).
Bank of England (BoE) Governor Andrew Bailey asserted that the central bank is committed to taking necessary measures to bring inflation down to its 2.0% target. He emphasized that despite efforts, the BoE has not observed sufficient progress to be confident in achieving this goal. This hawkish remark might have provided upward support for the Pound Sterling (GBP).
The decline in US bond yields over the past three sessions is attributed to the prevailing positive sentiment that the Federal Reserve (Fed) might conclude its interest rate hikes. However, as of the current press time on Thursday, the 10 and 2-year US Treasury yields stand slightly higher at 4.27% and 4.65%, respectively.
The US Dollar Index (DXY) hovers around 102.80, by the press time. The DXY seems indecisive, likely influenced by mixed remarks from Federal Reserve (Fed) members. Cleveland Federal Reserve (Fed) President Loretta Mester emphasized that any decision to implement additional interest rate hikes would depend on data-driven considerations.
Governor Michelle Bowman's expressed desire to keep the possibility of more rate hikes alive raises concerns about the persistence of inflationary pressure. In contrast, Fed Governor Christopher Waller has suggested a more accommodative approach by not insisting on maintaining high-interest rates.
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