Ella 
GBP/USD attracted some buying in Asia on Friday and now appears to have ended its two-day losing streak, falling to a one-week low near the 1.2615-1.2610 area hit the previous day. GBP/USD is currently trading around the 1.2630-1.2635 range, still subject to price fluctuations in the US dollar (USD).
The U.S. personal consumption expenditures (PCE) price index released on Thursday showed that the annual rate of the U.S. PCE price index in January reached its lowest level in three years, reaffirming bets on an eventual interest rate cut by the Federal Reserve (FED). This in turn leaves the opportunity for the U.S. Dollar Index, which tracks the greenback against a basket of currencies, to follow the previous day’s rebound from the key 200-day simple moving average (SMA) level. In addition, the maintenance of a general risk-on environment in the market is also seen as another factor that suppresses the relative safe-haven status of the US dollar and provides some support for the GBP/USD currency pair.
On the other hand, Bank of England (BOE) policymakers have been working hard to counter market expectations for an early interest rate cut, which is also boosting the pound. This further fueled the buying tone for the GBP/USD pair. Still, rising U.S. Treasury yields were supported by growing investor sentiment that the Fed will wait until its June policy meeting to lower borrowing costs, supported by hawkish comments from several Fed officials. effect. This in turn boosts the US dollar and prevents bulls from making aggressive bets on GBP/USD.
Market participants now look forward to the release of the final UK Manufacturing Purchasing Managers Index (PMI), which, along with a scheduled speech from Bank of England chief economist Huw Pill, could provide some impetus to GBP/USD. . Later in the early U.S. session, investors will take cues from the U.S. ISM Manufacturing Purchasing Managers Index, Michigan Consumer Confidence Index revisions and Fed speeches. Beyond this, U.S. bond yields and broader risk sentiment will drive U.S. dollar movements and create short-term GBP/USD trading opportunities. That said, GBP/USD looks set to fall on a weekly basis as the month opens, ahead of important US macro data.
