GBP/USD Forecast: Pound Looks to 3-Year Best on US Recession Watch

April 28, 2025 - Written by Ben Hughes

STORY LINK GBP/USD Forecast: Pound Looks to 3-Year Best on US Recession Watch

The Pound to Dollar exchange rate (GBP/USD) has consolidated above 1.3300 with solid buying on dips to trade around 1.3345 amid another net gain for the FTSE 100 index.

Much of the attention will be on high-profile US data releases such as GDP and payrolls but, given the lags involved, less glamourous data such as freight traffic and port arrivals may be more important in assessing the outlook.

Evidence of US weakness could push GBP/USD above 1.3430 to post 3-year highs, especially as there would be additional pressure on the Federal Reserve.

The latest data indicates that port traffic has declined sharply this month.

According to Goldman Sachs; “US businesses and consumers may be frozen by the uncertainty, which remains high and is why our economists are still on recession watch.”

MUFG commented on the US currency; “we remain unconvinced that the policy U-turn announced so far will be sufficient to trigger a sustained rebound for the US dollar with current tariff rates still hugely disruptive to global trade and the US economy.”

The calendar effect will be significant with the last day of April on Wednesday.


According to Barclays' month-end FX rebalancing model, strong dollar buying is indicated against the rest of the major currencies.

The US will release first-quarter GDP data on Wednesday. Consensus forecasts are for a weak annualised figure of 0.3% from 2.4% previously with a surge in imports pulling the figure lower.

A negative figure would increase recession speculation, potentially hurting the dollar, while there will be some relief if there is a figure above zero.

ING commented; “With savings and confidence down and delinquencies up, the consumer is less well-positioned to absorb the costs of supply chain disruption this time around.”

Nevertheless, it added; “If we're honest though, most of that has been true for a while, and we've all learned the hard way that you underestimate the US consumer at your peril.”

There is important employment data this week, culminating in Friday’s jobs report.

Job-openings data will be released on Tuesday followed by the ADP private-sector data on Wednesday.


As far as Friday’s data is concerned, consensus forecasts are for an increase in non-farm payrolls of around 130,000 with the unemployment rate holding at 4.2%.

ING commented; “Hiring is about as backward-looking an indicator as you can find, so were the numbers to suddenly turn much weaker, there's a clear risk of the Fed finding itself behind the curve. Particularly, if rapidly rising inflation holds it back from easing policy as quickly as it would like.”

The bank added; “that's not the place we think we'll end up. But it's a reminder that for all the false signals we have to contend with, the truth is, we often don't know we're in a recession until it's too late.”

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TAGS: Pound Dollar Forecasts