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GBP/USD entered a consolidative phase in early Asian trading on Thursday. The latest news suggests that the Bank of England (BoE) has held emergency talks with its international counterparts as the Credit Suisse crisis worsens following the intervention of the Swiss National Bank (SNB). Credit Suisse was in the spotlight on Thursday due to its liquidity issues. The collapse of Silicon Valley Bank (SVB) also worsened the situation, with the UK division being rescued by HSBC bank. Both central banks, the BoE and the SNB, appear to be in a hurry to deal with the crisis. Meanwhile, liquidity pressures in the banking and financial sectors have reduced demand for the US dollar, and US government bond yields have started to fall. This has made investors wary of aggressive monetary tightening across the globe. Market prospects for a Federal Reserve (Fed) rate hike at its March FOMC meeting have also softened due to the emerging liquidity issues. The US Producer Price Index (PPI) released on Wednesday came in below expectations, easing some price pressures from manufacturers. Meanwhile, US Retail Sales signaled a slowdown in retail activity. In terms of UK economic data, there is no major data due for release. Hence, GBP/USD is likely to take cues from US data, including Building Permits, Housing Starts, Initial Jobless Claims, and the Philadelphia Fed Manufacturing Survey. All of these data will be taken into consideration in the volatile risk sentiment environment. GBP/USD is still in a consolidation phase amid the Credit Suisse and Bank of England crisis. Liquidity issues in the banking and financial sectors are making investors wary of aggressive monetary tightening across the globe. This has an impact on the demand for the US Dollar and the market outlook for a Federal Reserve (Fed) interest rate hike. In addition, US economic data, such as Building Permits, Housing Starts, Initial Jobless Claims, and the Philadelphia Fed Manufacturing Survey, will be important considerations in the volatile risk sentiment environment.
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