• GBP/USD comes under pressure after climbing to 1.2180.
• The strong rebound in the greenback weighs on the risk complex.
• UK Chancellor Hunt delivered the Spring Budget.

In line with the rest of the risk-linked assets, GBP/USD faces renewed and strong downside pressure and revisits the 1.2040 region on Wednesday.

GBP/USD weaker on risk-off mood

GBP/USD adds to Tuesday’s decline and probes the area of 3-day lows in the 1.2045/40 band midweek on the back of the acute move higher in the greenback, which appears propped up by increasing risk aversion in the global market.

Indeed, the bearish mood among investors remains on the rise following fears over the European banking system, all exacerbated in response to negative news from Swiss lender Credit Suisse.

On the domestic front, Chancellor J.Hunt delivered the Spring Budget. On this, the Office for Budget Responsibility (OBR) now sees the economy avoiding a technical recession this year and expects inflation to drop to 2.9% at some point by year end. The OBR also sees the economy contracting just 0.2% this year and expanding 1.8% in 2024 and 2.5% in 2025.