GBP/USD pair is trading near the $1,2450 mark on the first trade week of April, just below Tuesday’s intraday highs of $1.25 level, since the greenback has been suffering significant losses amid worries over the health of the U.S. banking sector and after disappointing macroeconomic data.
GBP/USD pair, Daily chart
Pound Sterling has been in an upward trendline against the U.S. dollar since early March following the banking crisis in the United States, after the collapse of the two regional Signature and Silicon Valley banks, at a time British banks were resilient and able to support the local economy.
The pair, which was trading at the lows of $1.18 just before the collapse in early March, has posted a significant rally of 700 pips or 5.5% gains until today, recording its highest level since end-May 2022.
Since the greenback lost its safe-haven demand during the banking crisis and the receding fears over a potential contagion in the rest of U.S. banks, it has created a positive shift toward Pound Sterling, lifting the pair as high as the $1.25 mark, after four straight weeks of gains.
The bullish momentum on the Cable (GBP/USD pair) was also supported by the hawkish comments from Bank of England (BoE) Governor Andrew Bailey, who has suggested that further monetary tightening would be required if signs of persistent inflationary pressure became evident.
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