Following the mixed UK data, Bank of England (BoE) Governor Andrew Bailey spke during a BBC interview while saying, “There is evidence of encouraging progress on inflation, we have to be vigilant.” The policymaker also added that the risk of recession this year has gone down quite a lot. Further, BoE Monetary Policy Committee (MPC) member Catherine Mann said on Friday that she voted for a 25 basis point (bp) rate hike instead of a bigger increase, motivated in part by the fact that inflation expectations began to moderate, reflecting that monetary policy is having an effect.
On the other hand, US Durable Goods Orders for February dropped by 1.0% versus January's fall of 5% (revised from -4.5%) and the market expectation for an increase of 0.6%. Details suggested that the figure for Durable Goods Orders ex Defense and ex Transportation were also downbeat but Nondefense Capital Goods Orders ex Aircraft came in firmer-than-expected 0.0% to 0.2%, versus 0.3% prior. Moving on, the preliminary readings of the US S&P Global PMIs for March came in firmer as the Manufacturing gauge rose to 49.3 from 47.3 in February, versus 47.0 expected, while Services PMI rose to 53.8 from 50.6 prior and 50.5 expected. With this, the S&P Global's Composite PMI increased to 53.3 from 50.1 in February, versus 50.1 market forecasts.
Following the data, Atlanta Fed President Raphael Bostic told NPR that it was not an easy decision to raise the policy rate while also adding that he is not expecting the economy to fall into recession. "Fed has to get inflation under control,” said Fed’s Bostic. Further, St. Louis Federal Reserve President James Bullard, a policy hawk, said on Friday that the response to the bank stress was swift and appropriate, allowing the monetary policy to focus on inflation, per Reuters. The policymaker also added that the projections suggest one more rate hike that could be at the next FOMC meeting or soon after.
Elsewhere, the fears of Russia’s nuclear usage in its war with Ukraine and political chaos surrounding Brexit probes the GBP/USD bulls.
Looking ahead, a speech from BoE Governor Bailey can entertain intraday traders of the GBP/USD pair but major attention will be given to the Fed’s preferred inflation gauge, namely the Core Personals Consumption Expenditure (PCE) Price Index.
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