GBP/USD Forecast: Pound Ticks Higher vs Dollar Despite Strong US Labour Data

February 6, 2025 - Written by Tim Boyer

STORY LINK GBP/USD Forecast: Pound Ticks Higher vs Dollar Despite Strong US Labour Data

The Pound US Dollar exchange rate firmed on Wednesday following the release of the US’s latest ADP employment change.

At the time of writing, GBP/USD was trading at approximately $1.2532, up roughly 0.4% from the start of Wednesday’s session.

On Wednesday, the US Dollar (USD) lost ground against most of its counterparts following the release of the latest ADP employment report for January.

The data revealed that the US added 183,000 new jobs, surpassing the prior figure of 176,000 and exceeding the market's more
conservative estimate of 150,000.

Despite this positive news, the USD did not gain momentum. Instead, it weakened against most of its major peers, primarily due to an
optimistic market sentiment and the US Dollar’s nature as a safe-haven currency.

On Wednesday, the Pound (GBP) faced difficulties in gaining support and lost ground against several of its major trading partners following the release of the UK's finalised services PMI for January.

The final services index for January came in at 50.8 and printed slightly lower than the initial estimate of 51.2.

While the index still indicated expansion (a reading above 50), the downward revision from the preliminary figure dampened market
sentiment toward Sterling during Wednesday’s European session.

On Thursday, the main driver of movement for the Pound US Dollar exchange rate will likely be the Bank of England's (BoE) upcoming interest rate decision.

While markets widely anticipate a 25-basis point cut, should the BoE include any dovish remarks in its accompanying press release, Sterling will likely be stymied as a result.

On the US Dollar side, no significant domestic data releases are scheduled for release on Thursday.

As the week concludes, this absence of data could make it challenging for USD exchange rates to establish a clear direction.

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TAGS: Pound Dollar Forecasts