Pound US Dollar (GBP/USD) Exchange Rate Softens following UK and US Data Releases

January 17, 2025 - Written by Ben Hughes

STORY LINK Pound US Dollar (GBP/USD) Exchange Rate Softens following UK and US Data Releases

The Pound Sterling weakened against US Dollar on Thursday following the release of both the UK’s latest GDP data and the US’s latest retail sales.

At the time of writing, the GBP/USD exchange rate was trading at approximately $1.2194, down roughly 0.4% from the start of Thursday’s session.

On Thursday, the Pound (GBP) struggled against several of its key trading partners following the UK's release of its latest GDP figures.

The numbers showed that the British economy expanded by 0.1% in November, following two straight months of contraction.

The ONS Director of Economic Statistics, Liz McKeown, commented:

‘The economy continues to be broadly flat, having grown slightly in November following two small falls in the previous months. Construction also grew, led by new commercial developments, while production continued to decline in November with
further falls across a range of manufacturing industries and oil & gas extraction companies.’

While this indicated a return to growth towards the end of the year, the pace of recovery was slower than expected, resulting in weaker GBP exchange rates during the European trading session.

On Thursday, the US Dollar (USD) fluctuated within a broad range, strengthening against some currencies while remaining largely unchanged against others.

This movement came after the release of the latest retail sales data for the country.

The retail sales index for the previous month declined more than anticipated, dropping from 0.8% to 0.4%, instead of the expected 0.6% reading.

Despite these disappointing figures, the US Dollar maintained its stability and even gained ground against several of its counterparts, buoyed by a risk-averse market sentiment and its position as a safe-haven currency.

Looking ahead to Friday, the main factor influencing the Pound US Dollar exchange rate will likely be the release of the UK's latest retail sales data.

Retail sales in December are expected to rise from 0.2% to 0.4%. If the figures meet these projections, it could bolster GBP exchange rates.

On the US Dollar side, thin trading conditions at the end of the week, due to a lack of significant domestic economic data, may put some pressure on the 'Greenback’ as the week draws to a close.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts