GBP/USD faces barricades around 1.2150 as odds of a less-hawkish BOE policy advance

The GBP/USD pair struggles to cross the immediate hurdle of 1.2150 after a minor pullback from 1.2100. The asset is likely to behave volatile as investors are awaiting the announcement of the interest rate decision by the Bank of England (BOE).

Considering the market expectations, the BOE will announce a rate hike by 50 basis points (bps). Featuring a rate hike by half of a per cent by BOE Governor Andrew Bailey will push the interest rates to 1.75%. It is worth noting that price pressures in the UK have climbed to 9.4%. Also, the inflation rate has not shown any sign of exhaustion yet, which indicates that the new normal 50 bps rate hike is not sufficient to offset the accelerating inflationary pressures.

Meanwhile, the US dollar index (DXY) surrendered its entire gains on Wednesday and settled flat despite the upbeat US Institute of Supply Management (ISM) Services data. The economic data landed at 56.7, higher than the estimates of 53.5 and the prior release of 55.3. Also, the US ISM Services New Orders Index was released at 59.9, lower than the consensus of 60.5 but remained solid than the former release of 55.6.

The upbeat US ISM Services economic data indicated that the demand is resilient and sent the tech stocks on fire. This tech-savvy index NASDAQ rose 2.59% and swiftly improved investors' risk appetite.

Going forward, the US Nonfarm Payrolls (NFP) data will be the key event this week. A preliminary estimate for the employment generation is 250k, lower than the prior release of 372k.