Ella 
During the Asian session on Monday, GBP/USD was trading around 1.2500, trying to extend gains for the third consecutive session. The hawkish tone from Bank of England (BOE) officials provided upward support for GBP/USD.
Huw Pill, chief economist of the Bank of England, said in an interview with the Financial Times on Friday that the Bank of England will continue to fight inflation resolutely and emphasized that the Bank of England cannot relax its tightening monetary policy. In addition, Bank of England Governor Andrew Bailey’s recent hawkish remarks emphasized the need to raise interest rates in the longer term.
GBP/USD was boosted by positive UK Purchasing Managers Index (PMI) data released on Thursday. Business activity in the UK showed signs of a turnaround, with preliminary readings for the S&P Global/CIPS Services Purchasing Managers’ Index and Composite Purchasing Managers’ Index expanding in November after three consecutive months of contraction. The services PMI and composite PMI returned to expansionary territory, defying expectations of stagnation.
However, the manufacturing purchasing managers’ index improved but is still below the expansion threshold. On the consumer front, the GfK consumer confidence index fell less than expected in November.
U.S. Treasury yields rose, but the U.S. dollar index (DXY) still extended losses. As of press time, the 10-year U.S. Treasury yield rose for the fourth consecutive trading day and remained at 4.49%.
The latest comments from Fed officials last week added nuance to expectations that the Fed could ease monetary policy next year. While markets expect the Fed may ease policy, Fed officials have said further tightening is necessary. In addition, the Fed also emphasized that decision-making will depend on published economic data, highlighting the importance of evaluating economic indicators in order to take appropriate measures to address inflation-related issues.
There is no data released in the UK that is important enough to affect the market this week, and market participants may pay attention to the speeches of Bank of England (BoE) officials. In the U.S., key indicators to watch include annual GDP (Q3), core PCE price index and ISM manufacturing purchasing managers index.
