• The FOMC minutes failed to underscore the possibility of a 50bps hike at the March meeting, weighs on US Dollar.
• There are plenty of risk-off Russia – Ukraine headlines which could help the safe haven – USD.
• The rate hike expectation from BoE and upbeat CPI data favors the sterling.

Pound edged higher against the greenback on Thursday as the US dollar was pressured due to the less hawkish FOMC minutes despite mounting tension over Russia- Ukraine.

According to the January meeting minutes released on Wednesday, Fed officials last month agreed that, with inflation widening its grip on the economy and employment strong, it was time to tighten monetary policy; however decisions would depend on a meeting-by-meeting analysis of data. Strategists said the minutes suggested policymakers may not be as hawkish as expected.

Moving on to geopolitical front, alarmingly, the United States and NATO said Russia was still building up troops around Ukraine on Wednesday despite Moscow’s insistence it was pulling back. The Russian defense ministry said its forces were pulling back after exercises in southern and western military districts near Ukraine.

On the other hand, The pound was trading high since Wednesday after domestic data showed inflation in Britain at a nearly 30-year high. The Bank of England is expected to hike interest rates again. The Central Bank has hiked rate twice since December. Rates have risen to 0.5% from 0.1%. Another hike to 0.75% or 1% on March 17 after the BoE’s next meeting is expected.

The data showed that the Consumer Price Index on an annual basis showed a record to 5.5% in January, highest since March 1992, and above previous reading of December at 5.4%.

GBP/USD 4 Hour Chart:

Support: 1.3540 (S1), 1.3499 (S2), 1.3469 (S3).

Resistance: 1.3611 (R1), 1.3641 (R2), 1.3682 (R3).

Greenback trades low responding to less hawkish FOMC minutes, we expect a bullish trend for GBP/USD.