The Cable has been dumped heavily by the market participants on intensifying fears of China’s bailout to Russia. The US has told its allies that Russia has requested military assistance from China in the ongoing Russian invasion of Ukraine. Furthermore, the latter has displayed its willingness to assist the former in the future. The US has also stated that the Chinese economy might be providing military support to Russia already.
Meanwhile, ”The Chinese embassy in the US on Sunday said it had no knowledge of any Russian request or positive Chinese response to Moscow. Russia on Monday also denied making any request to China.”
The state has improved the charm as a safe-haven and investors have discarded the GBP amid a broader risk-aversion theme.
Separately from the geopolitical strains, the interest rate decision from the Bank of England is in focus. The BOE have hiked their interest rates by 25 basis points (bps) twice in December and February. The BOE is more likely to follow the rate hike streak this time too and push the benchmark rates to 0.75%. Britain’s National Statistics will announce the Claimant Count Change (number of unemployed people in the UK) on Tuesday, which will have a vital impact on BOJ’s monetary policy.
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