GBP/USD aims to recapture 1.1900 as market mood soars ahead of FOMC minutes
- GBP/USD is looking to reclaim the 1.1900 hurdle amid positive market sentiment.
- Investors are awaiting the FOMC minutes release to get a detailed explanation behind the bigger rate hike.
- A decline in UK PMI numbers could be the outcome of a slowdown in consumer spending.
The GBP/USD pair is aiming to recapture the immediate hurdle of 1.1900 sooner as the market mood has turned extremely cheerful. Investors have shrugged off China’s Covid-19 worries and have started pouring funds into risk-perceived assets. Also, the rising expectation of a slowdown in the rate hike pace by the Federal Reserve (Fed) has shifted traction in the favor of risk appetite theme.
A three-day winning spell of the US dollar index (DXY) halted on Tuesday after an improvement in investors’ risk appetite. The DXY is declining towards the critical support of 107.00. S&P500 witnessed a significant buying interest as a slowdown in the rate hike pace by the Fed will trigger economic projections. Meanwhile, the 10-year US Treasury yields have dropped to near 3.76%.
Going forward, the Cable will keep an eye on the release of the Fed Open Market Committee (FOMC) minutes. The minutes will provide a detailed explanation behind the announcement of the fourth consecutive 75 basis points (bps) rate hike. Also, it will provide cues indicating the chances of a bigger rate hike continuation.
Apart from the interest rate guidance, the economic and financial conditions of the US will be of utmost importance.
On the UK front, the release of the S&P PMI numbers will be significant for the market participants. The Manufacturing PMI is seen lower at 45.8 vs. the prior release of 46.2. And, the Services PMI is expected to decline to 46.2 from the former release of 46.5. A decline in PMI numbers could be crucial for bringing price stability as lower consumer spending would support a decline in price growth by the manufacturers and service providers.