Ella 
GBP/USD attempts to recover from the previous session’s losses. In Asia on Friday, GBP/USD edged higher to around 1.2740. The US dollar (USD) is trying to halt its losing streak towards the end of 2023, but seems to be struggling to stay in bullish territory. At press time, the U.S. Dollar Index found resistance at 101.13.
U.S. Treasury yields fell after rising on Thursday. Investors expect U.S. Treasury yields to fall, which weighs on the dollar. On the previous trading day, the two-year and 10-year U.S. Treasury yields closed higher at 4.28% and 3.84% respectively. But on Friday, both yields were down, at press time, at 4.27% and 3.83%, respectively.
Additionally, unfavorable U.S. economic data, including a higher-than-expected increase in U.S. jobless claims last week in November and flat pending home sales, may have limited the dollar’s gains. The data bolstered prospects for a more accommodative stance by the Federal Reserve at its upcoming interest rate decision.
The number of people filing for unemployment benefits in the United States rose to 218,000 in the week ended December 23, exceeding expectations by 210,000. Pending home sales in November were 0.0% monthly and 1.0% expected.
The December Chicago Purchasing Managers Index will be another number to watch on Friday, which will shed further light on the state of the Chicago-area economy and help provide an overall assessment of the U.S. economy.
Sterling appears to have recovered, driven by expectations that the Bank of England may maintain its restrictive monetary policy stance. UK inflation currently ranks first among the G7.
However, the decision-making process of the Bank of England policymakers is full of challenges, because the Bank of England policymakers have to deal with high price pressures and the risk of the economy entering a technical recession due to deteriorating domestic market demand. These complex economic conditions have increased volatility and uncertainty in currency markets, affecting the performance of the pound.
Market participants are likely to focus on seasonally adjusted UK national housing price data for December. The indicator is expected to show a monthly gain of 0.0%, following a 0.2% gain in November. The UK’s national housing price annual rate in December is likely to reach -1.4%, the previous value was -2.0%.
