The Pound to Dollar exchange rate held steady on Thursday, with GBP/USD hovering near the mid-1.36s despite softer UK growth figures, as improved risk appetite curbed US Dollar demand.
Pound to Dollar (GBP/USD): 1.3608 (-0.11%)
Euro to Dollar (EUR/USD): 1.18593 (-0.13%)
Dollar to Japanese Yen (USD/JPY): 152.8235 (-0.29%)
DAILY RECAP:
The Pound avoided notable losses after the UK’s preliminary GDP estimate for the fourth quarter of 2025 undershot expectations.
Official figures showed the economy expanded by 0.1%, unchanged from the previous quarter and short of forecasts for a 0.2% rise.
The weaker reading fuelled speculation that the Bank of England may need to cut interest rates to support growth, a view reinforced by comments from Deputy Governor Sarah Breeden.
However, Sterling proved resilient. Some analysts argued that growth could improve into 2026, helping to cushion the immediate impact of the softer data.
Meanwhile, the US Dollar edged lower as a risk-on market mood dampened safe-haven demand.
The ‘Greenback’ trimmed some of Wednesday’s gains, when a stronger-than-expected non-farm payrolls report had bolstered expectations that the Federal Reserve may delay rate cuts.
Near-Term GBP/USD Forecast: US CPI in Focus
Attention now turns to the latest US consumer price index.
Economists expect headline inflation to cool from 2.7% to 2.5% in January, with core inflation also forecast to ease.
A softer reading could revive Federal Reserve rate cut expectations and weigh on the US Dollar.
For Sterling, the absence of fresh UK economic releases leaves political developments in focus. If concerns surrounding Prime Minister Keir Starmer continue to subside, the Pound may remain supported, although gains could prove limited.
