GBP/USD gives back the progress following the Federal Reserve interest rate decision as the 10-Year US Treasury yield increases to fresh annual high (1.75%), but crucial data prints coming out of the UK will keep the British Pound within the monthly range as the Bank of England (BoE) reiterates that"UK GDP was projected to regain closely over 2021 towards pre-COVID levels"

FUNDAMENTAL FORECAST FOR BRITISH POUND: NEUTRAL
The British Pound tracks the starting range for March as GBP/USD proceeds to spiral just below technical resistance, and the exchange rate may consolidate over the remainder month as both the Fed and BoE retain the current course for monetary policy.

Looking forward, the upgrade to the UK Consumer Price Index (CPI) may overshadow the Employment report as the BoE points out that"a further increase in unemployment was projected during the next couple of quarters," and also an uptick in cost growth may generate a bullish reaction in the British Pound as"inflation was expected to go back towards the 2% goal in the spring"

At precisely the exact same time, the core CPI is expected to hold steady at 1.4% per annum in February, and indications of sticky inflation may continue to keep the Monetary Policy Committee (MPC) on the sidelines as"developments in global GDP growth have been somewhat stronger than expected."

In turn, that the BoE may rely upon its current tools to accomplish its policy targets as"the Committee does not intend to tighten monetary policy at least until there's clear evidence that considerable progress has been made in removing spare capacity and achieving the 2% inflation target sustainably, and Governor Andrew Bailey and Co. may stick to the identical script at the next interest rate decision on May 6 as"the Committee judged the existing position of fiscal policy remains proper."

Until then, new data prints coming out of the UK may keep the British Pound inside the monthly range as inflation is expected to return to pre-pandemic levels later this season, but key market trends may influence GBP/USD as the US Dollar widely reflects an inverse relationship with investor confidence.

With that said, the decrease from the February large (1.4241) can prove to be a correction from the broader trend rather than a change in behaviour as important central banks rely in their crisis tools to reach their coverage goals, and the exchange rate may continue to exhibit the bullish price action seen in 2020 so long as the Fed remains on path to"increase our holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month."