Anna 
The GBP/USD pair is on an upward trend as the US Dollar (USD) faces downward pressure, driven by market sentiment anticipating a potential Federal Reserve rate cut in the upcoming March meeting. This sentiment gained momentum after former Fed official James Bullard suggested at the National Association for Business Economics (NABE) conference that the Fed should consider lowering interest rates to prevent hindering economic activity due to higher rates. During Asian trading hours on Monday, the GBP/USD pair trades higher around 1.2620.
In addition to the weakening US Dollar, the GBP/USD pair finds support from UK housing data indicating an annual improvement in domestic property prices. The UK Rightmove House Price Index (YoY) showed a 0.1% increase in February, a positive shift from the previous decline of 0.7%. However, the monthly report revealed a contraction, with February’s growth at 0.9%, compared to the previous rise of 1.3%.
Despite the positive housing data, the United Kingdom has officially entered a technical recession, marked by two consecutive quarters of negative GDP growth. Bank of England policymaker Catharine L. Mann emphasized the need for at least one more set of inflation data before determining the central bank’s next course of action.
The US Dollar Index (DXY) continues its downward trend for the fourth consecutive session, slipping to around 104.20. Despite the initial boost from the improved Producer Price Index (PPI) from the United States last Friday, the US Dollar (USD) eventually closed the session with losses. With the Presidents’ Day bank holiday observed in the United States on Monday, the movement in the USD is expected to remain limited.
