Pound to Dollar Today: GBP/USD 2025 Best Dented by UK Inflation

February 19, 2025 - Written by Frank Davies

STORY LINK Pound to Dollar Today: GBP/USD 2025 Best Dented by UK Inflation

The latest UK inflation data released on Wednesday saw the Pound Sterling fall back from its 2025 best exchange rate levels against the US Dollar to trade at 1.26132.

The British Pound fell back against currency rivals after the UK released its latest consumer price index (CPI), which rose to 3.0% year-on-year, marking a significant uptick from December's 2.5% and surpassing both market and Bank of England (BoE) forecasts by 0.2 percentage points.

At the time of writing, GBP/USD was trading at approximately $1.26132, marginally lower on the day.

GBP/USD was subdued on Tuesday despite the publication of some better-than-expected UK labour data.

On Tuesday, the Pound (GBP) gained some modest support against several of its counterparts after releasing the UK’s latest employment figures.

The unemployment rate for December remained steady at 4.4%, defying expectations of a rise to 4.5%.

Moreover, the latest wage growth data also saw an uptick, increasing from 5.6% to 5.9% over the same period.

These positive economic indicators lowered the chances of an interest rate cut by the Bank of England (BoE), thereby bolstering GBP exchange rates following the release.

On Tuesday, the US Dollar (USD) fluctuated against its counterparts, maintaining its position against most of its peers while gaining ground in other areas, despite a lack of significant economic news.

The slight uptick in the ‘Greenback’ occurred just a day before the release of the latest FOMC meeting minutes, set for Wednesday.

If the minutes indicate the central bank's continued hawkish stance, USD exchange rates could climb during mid-week trading.

Looking ahead, Wednesday's main driver of movement for the Pound US Dollar exchange rate will be the latest FOMC meeting minutes.

If the minutes do, in fact, reflect a hawkish tone from the central bank, USD exchange rates could start mid-week trading on a strong note.

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TAGS: Pound Dollar Forecasts