January 30, 2025 - Written by Frank Davies
STORY LINK Pound to Dollar Forecast Today: GBP Rangebound vs USD ahead of FED Rate Decision
The Pound Sterling (GBP) mainly traded flat against the U.S. Dollar on Wednesday as investors awaited the Federal Reserve’s latest interest rate meeting.
At the time of writing, Pound US Dollar exchange rate (GBP/USD) was trading at approximately $1.2422, virtually unchanged from the start of Wednesday’s session.
On Wednesday, the US Dollar (USD) remained largely stable against most of its major counterparts, following a USD rally on Tuesday.
This surge came after US President Donald Trump hinted at the possibility of imposing universal tariffs on imported goods, potentially much higher than 2.5%.
On Wednesday, the ‘Greenback’ fluctuated within a tight range as investors held their breath in anticipation of the Federal Reserve's upcoming interest rate decision.
While the central bank is expected to maintain current interest rates, any hawkish signals in the forward guidance could provide a boost to USD exchange rates heading into Thursday's European trading session.
The Pound (GBP) faced difficulty in gaining traction against most of its major peers on Wednesday, largely due to the continued lack of UK data releases which weighed on GBP exchange rates.
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Despite the absence of economic indicators, Sterling managed to maintain a relatively stable position, buoyed by optimism around the UK government's pro-growth plans.
UK Chancellor Rachel Reeves alluded to several measures aimed at stimulating the British economy, helping to keep GBP exchange rates afloat during mid-week trading.
GBP/USD Exchange Rate Forecast: US Data to Drive Movement
Looking ahead, the main driver of movement for the Pound US Dollar exchange rate on Thursday will likely be the release of the latest US GDP figures.
With US GDP projected to decline from 3.1% to 2.8% in the fourth quarter of last year, a result in line with expectations could weaken the ‘Greenback.’
Meanwhile, across the Atlantic, the UK is set to have another relatively quiet day in terms of economic data, which may keep GBP exchange rates directionless.
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TAGS: Pound Dollar Forecasts