GBP/USD sees retreats on stronger dollar ahead of jobs data

The GBP/USD pair fell below the 20-day SMA, reaching 1.2320. The US dollar’s recovery was fueled by rising yield rates and a risk-off market mood. December’s labour market figures are expected to influence Fed’s next monetary policy decisions.

If the US economy continues to show resilience, the pair is likely to face further downside. The UK economy appears shaky, with signs of easing food price inflation and elevated expectations of Bank of England rate cuts for 2024.

The US dollar’s robustness suggests it may appreciate further against the British pound, making short-term exchange rate prospects bearish. However, December’s Nonfarm Payrolls, Average Hourly Earnings, and Unemployment rate figures will set the pace for the pair, as weak readings may intensify dovish bets on the Fed.