The US Dollar fell on Friday sending GBP/USD to test 1.22 the figure although further declines in the shares of Credit Suisse and First Republic Bank rattled markets and weighed on the pair later in the day. However,  UBS is said to take over Credit Suisse in a deal aimed at stemming what was fast becoming a global crisis of confidence which is putting a bid back into the pair. GBP/USD is up by some 0.2% and trading back in the 1.22s.

The UBS and  Credit Suisse deal is expected to be closed by the end of this year. Colm Kelleher, chairman of UBS Group, said the agreement "represents enormous opportunities". He also said that his bank's long-term aim would be to downsize Credit Suisse's investment banking business and align it with the "conservative risk culture" of UBS.

Meanwhile, markets will look ahead to this week´s events in the Federal Reserve and Bank of England interest rate decisions. The BoE is expected to hike by 25bp on 23 March bringing it to 4.25%.

´´Markets are currently pricing around 15bp for the meeting, thus close to an equal implied probability for an increase of 25bp in the Bank Rate and an unchanged decision,´´ analysts at  Danske Bank said. ´´While the latest UK economic data releases, in our view, still support a 25bp hike on Thursday, we acknowledge that the probability of the BoE keeping the policy rate unchanged has risen considerably amid rising systemic risk fears. This risk is only supported by what we consider to be a fairly cautious Monetary Policy Committee (MPC).´´

As for the Fed, analysts at TD Securities expect a 25bp rate hike, taking the Fed Funds rate to 4.75%-5.00%. ´´Post-meeting communication is likely to emphasize that the Fed is not done yet in terms of tightening (also reflected in a slightly more hawkish dot plot), with officials also flagging the more uncertain economic environment, resulting in an even larger emphasis on data dependence.´´