March 28, 2025 – Written by Frank Davies
STORY LINK GBP/USD Forecast: Pound Sterling Strengthens vs Dollar Following Downbeat US GDP
Pound Sterling (GBP) climbed against the US Dollar (USD) on Thursday following the publication of the US’s latest GDP data.
At the time of writing, GBP/USD was trading at approximately $1.2943, up roughly 0.5% from the start of Thursday’s session.
On Thursday, the US Dollar (USD) weakened against most of its major counterparts following the release of the latest US GDP figures.
The index, which measured economic growth in the final quarter of last year, fell from a previous 3.1% to 2.4%, just marginally above the expected 2.3% reading.
Despite slightly outpacing expectations, the GDP figure represented the slowest growth rate since the first quarter of 2024, fuelling concerns about the health of the US economy.
Before the GDP data was released, the US Dollar had already been under pressure due to new tariff threats from US President Donald Trump on cars.
On Thursday, the Pound (GBP) traded in a narrow range against its key trading partners following the release of the UK’s Spring Statement on Wednesday.
The budget revealed substantial spending cuts and a significant downgrade of the UK’s growth forecast by the Office for Budget Responsibility (OBR).
The OBR revised the 2025 growth projection from 2% to just 1%.
While the Pound recovered much of its earlier losses on Thursday, concerns over President Trump’s announcement of tariffs on automobiles dampened any significant gains in GBP exchange rates.
This development raised worries about the potential negative impact on the UK’s economic outlook.
As we look ahead to Friday, the Pound US Dollar exchange rate will likely be primarily influenced by key economic data releases from both the UK and the US.
The UK is set to unveil its February retail sales figures, with analysts predicting a drop from 1.7% to -0.3%.
If the data matches these forecasts, it could undermine the Pound by the end of the week.
On the US side, the latest core PCE price index, which is the Federal Reserve’s preferred inflation indicator, is due to be released.
If the index rises from 2.6% to the expected 2.7%, it could provide a modest boost to the US Dollar exchange rate as the week concludes.
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TAGS: Pound Dollar Forecasts
