Pound to Dollar Forecast: GBP/USD Subdued Following UK, US Data

February 14, 2025 - Written by David Woodsmith

STORY LINK Pound to Dollar Forecast: GBP/USD Subdued Following UK, US Data

The Pound US Dollar exchange rate traded mostly flat on Thursday as both the UK and the US released several economic data releases.

On Thursday, the Pound (GBP) saw a modest uptick against the majority of its counterparts.

This boost was sparked by the release of the UK’s GDP figures for the last quarter of the previous year, which showed a 0.1% growth reading, exceeding the expected 0% figure.

The encouraging economic data helped to alleviate some of the pessimism surrounding the UK economy this week and reduced the likelihood of an interest rate cut by the Bank of England (BoE).

Following the publication, money markets revised their BoE interest rate cut predictions from May to June.

On Thursday, the US Dollar (USD) weakened against most of its peers despite some positive US data releases.

The latest producer price index (PPI) for January showed a smaller decline than expected, further reducing bets on a Federal Reserve interest rate cut, following Wednesday's higher-than-expected inflation figures.

Additionally, the US released its latest initial jobless claims report for the week ending February 8th, which came in below expectations.

Despite these positive economic indicators, the 'Greenback' still struggled, partly due to a generally optimistic market sentiment and the US Dollar's status as a primary safe-haven currency.

Looking ahead, the main driver of movement for the Pound US Dollar exchange rate on Friday will likely be the release of the latest US retail sales index.

January's figures are expected to show a decline in consumer demand, with the index projected to fall from 0.4% to -0.1%.

If the data confirms this expected decline, the US Dollar could end the week on a weaker note.

For the Pound, there are no significant UK data releases scheduled for Friday, which means Sterling may trade without a clear direction as the week comes to a close.

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TAGS: Pound Dollar Forecasts