GBP/USD is having a difficult time pulling away from the 1.2150 area. Economists at ING expect the pair to drop back to the 1.15-1.18 range  in the new year.

Outlook for 2023 still looks challenging

“While dealing with multiple strikes, the UK will not see a lot of data releases in the coming two weeks, with tomorrow’s first GDP data unlikely to move the market. There are no scheduled Bank of England speakers until the first week of January.”

“We continue to see mostly downside risks for the Pound in the new year, as a recessionary environment and sensitivity to market instability may cause a return to the 1.15-1.18 range in Cable.”

“For this festive season, GBP/USD may hold around 1.2100-1.2250.”