GBP/USD Forecast: Pound to Dollar Rate Holds Near $1.23

January 22, 2025 - Written by Tim Boyer

STORY LINK GBP/USD Forecast: Pound to Dollar Rate Holds Near $1.23

The Pound US Dollar exchange rate was mostly quiet on Wednesday amid an absence of both UK and US economic data releases.

At the time of writing, GBP/USD was trading at approximately $1.2354, virtually unchanged from the start of Thursday’s session.

On Wednesday, the Pound (GBP) experienced minimal fluctuation against most other currencies, as the lack of major economic data left the British currency directionless.

Nevertheless, Sterling managed to regain much of the ground it lost on Tuesday, after the country's latest unemployment rate unexpectedly rose.

With no significant economic indicators or clear market sentiment to drive the currency, GBP exchange rates remained trapped in a narrow range throughout the day.

US Dollar (USD) Drifts Lower on Trump’s Third Day in Office

On Wednesday, the US Dollar (USD) failed to capture investor interest and declined against several of its major counterparts as newly inaugurated President Donald Trump entered his third day in office.

On Tuesday, USD exchange rates saw significant volatility, with a sharp rise in the morning followed by a retreat in the afternoon, after the President signed a series of executive orders on Monday.

However, on Wednesday, markets adopted a cautious stance, as new uncertainties surrounding US tax policies weighed on the 'Greenback.'

In the absence of any economic data to influence trading, this uncertainty kept USD exchange rates under pressure throughout the European trading session.

GBP/USD Forecast: UK and US Data in the Spotlight

Looking ahead, the main driver of movement for the Pound US Dollar exchange rate on Thursday will likely be several economic releases from both the UK and the US.

For the Pound, the UK is scheduled to publish its latest CBI business optimism index and the CBI industrial trends orders survey.

The business optimism index is expected to show a slight improvement, potentially offering Sterling some modest support at the start of Thursday’s European session.

However, the industrial trends orders survey is forecast to decline again, which could temper any potential gains for the Pound.

On the US Dollar side, the US will release its latest initial jobless claims report for the week ending January 18th.

If the data indicates an increase in initial jobless claims as anticipated, this could weaken the 'Greenback' as the week progresses.

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TAGS: Pound Dollar Forecasts