GBP/USD struggles to breach 1.3050 ahead of BOE and Fed monetary policies

• GBP/USD is struggling to breach 1.3050 as investors await monetary policies from the Fed and BOE.
• The cable may extend gains amid risk-on impulse in the market.
• The DXY is hovering around 99.00 in the absence of materialistic headlines from the Russia-Ukraine war.

The GBP/USD pair has opened on a cautiously positive note on Monday as the week is going to bring a power-pack action for the cable.  The announcement of monetary policy from the Federal Reserve (Fed) will keep the greenback sellers on their toes while investors eye one more interest rate hike from the Bank of England (BOE) after two hikes of 25 basis points (bps) each in December and February. It is worth noting that the BOE was the first central bank that hiked its interest rates post the Covid-19 pandemic.

The think tank of the BOE has forecasted consumer price inflation would peak at about 7.25% in April, when household energy tariffs are due to rise by more than half in the pre-Ukraine crisis period, as per Reuters.

Post Russia’s invasion of Ukraine things have changed dramatically as the natural gas and oil prices have skyrocketed and the extent of inflation in the pound area is likely to move beyond the BOE’S Feb meet forecasts. This has raised the odds of one more interest rate hike from the BOE.

Meanwhile, the US dollar index (DXY) is hovering around 99.00 due to the absence of materialistic headlines from the Russia-Ukraine war. The monetary policy from the Fed is due on Wednesday and investors are betting on a beyond imagination outcome this time.

Apart from the monetary policies of the Fed and BOE, investors will also keep an eye over the activities of British National Statistics as the agency will report the Claimant Change numbers. This will present the number of unemployed people in the UK.