The GBP/USD has encountered renewed selling pressure, accelerating its decline below the 1.2200 mark during Friday's European trading session. The pair's downward momentum is largely attributed to an urgent demand for the US Dollar, which continues to exert negative pressure on the GBP/USD exchange rate. This movement comes as the European Central Bank (ECB) is anticipated to introduce further rate cuts, a possibility that has already begun to weigh on the Euro.
The expectation of these rate cuts has added to the Euro's challenges, particularly against the backdrop of a US Dollar that is finding stability amid a cautiously optimistic market mood. Consequently, the EUR/USD has maintained a defensive stance near 1.0300 during the European session on Friday. The pair also faces headwinds from an unexpected decline in UK Retail Sales for December, adding another layer of complexity to the ongoing currency fluctuations.
Market participants are also awaiting mid-tier US economic data, which could further influence currency movements. The data will likely provide more clarity on the economic situation in the United States and could determine whether the current trend in US Dollar demand persists.
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