The survey also included a robust, but still highly inflationary, March ISM Manufacturing PMI survey. The US economy created 432K new jobs in March. Wages grew at 5.6% YoY. While the headline ISM Manufacturing PMI index was still in expansion territory, the Price Paid subindex jumped to its highest level since July. A surge in US yields was good news for the US dollar, especially at the short end of the curve. The market interpret Friday's data to strengthen the possibility that the Fed will raise interest rates in 50-bps intervals over the next quarters. This is also evident as more Fed policymakers have indicated their willingness to accept larger rate moves.

GBP/USD trades just above the 1.3100 mark at the time of writing. On the day, losses of 0.2% are also evident. It continues to show that it cannot break above the 21-Day Moving Average which has been limiting price action for almost two weeks. The stronger dollar is not the only factor that is causing this headwind. It also has a negative impact on UK fundamentals. The BoE is concerned that households in the UK will pay more than 50% on their energy bills starting Friday, April 1. On Friday, Governor Andrew Bailey stated that the BoE has already observed evidence of an economic slowdown and that they expect this to impact domestically-generated inflation. This comes after the BoE lowered its position at its last meeting regarding the need to increase rates in the next quarters to combat inflation.

The Fed will likely become more hawkish and the BoE will be more dovish. This means that GBP/USD will continue to struggle to get above its 21DMA, and bears will be looking for downside targets. These are the previous lows in the 1.3050 zone and the March lows that were right at the psychologically crucial 1.3000 level.