GBP/USD pops towards the 1.24 psychological target
- GBP/USD bulls are in the market with eyes on the 1.24 area.
- Traders will be turning to Friday's key US inflation data.
GBP/USD was last up 0.65% at 1.2391 having traveled between a low of 1.2293 and 1.2392 putting the pair on track for its biggest monthly gain since November, as concerns among investors over the banking sector dwi9ndled and dented the safe haven US Dollar.
The Great British Pound has climbed around 3% vs. the US Dollar in March and is penetrating its way through resistance to eight-week highs. Domestically, at more than 10%, headline inflation in Britain is showing no signs of slowing down. In this respect, money markets show traders now think rates will top out at 4.5% by September meaning the Bank of England likely has one more quarter-point rise planned.
´´The BoE is hoping for a quick decline in inflation in the course of the year,´´ analysts at Commerzbank explained. ´´So far, however, the economic data rather harbor upside risks for inflation. If inflation does turn out to be more persistent than the BoE expects, its rather dovish stance is likely to weigh further on the pound.´´
Meanwhile, traders will look to the February reading of personal consumption expenditures (PCE) on Friday. The data is the Fed's preferred inflation gauge. January figures showed a sharp acceleration in consumer spending so the data will be closely eyed.
Today, US data showed that jobless claims last week rose more than expected from the week before indicating a cooling labor market, while fourth-quarter Gross Domestic Product growth was slightly lower at 2.6% compared with earlier estimates of 2.7%, both supporting the case for a softer Fed policy.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
