Pound to Dollar FX Forecast: GBPUSD Price Retreats but Retakes 1.33

May 2, 2025 - Written by David Woodsmith

STORY LINK Pound to Dollar FX Forecast: GBPUSD Price Retreats but Retakes 1.33

Pound Sterling (GBP) edged lower against the US Dollar (USD) on Thursday after upbeat US economic data lent support to the ‘Greenback’.

At the time of writing, the Pound to Dollar exchange rate (GBP/USD) was trading at approximately $1.3297, down roughly 0.2% from the start of Thursday’s session.

The US Dollar (USD) maintained a positive trajectory on Thursday, with its modest appreciation extending Wednesday's gains.

The upside in USD exchange rates was aided by the latest US ISM manufacturing PMI.

While the index showed a slight decline from 49 to 48.8, it still beat expectations for a sharper drop to 48.0. Enough to slightly ease concerns that the US factory sector is in a downward spiral.

Risk-off flows added to the US Dollar’s appeal, with skittish investors favouring safe-haven assets amid ongoing trade uncertainty and wider market turmoil.

In contrast, the Pound (GBP) struggled to find any notable support on Thursday amid the absence of UK economic data.


GBP investors also appeared wary as the UK headed to the polls for local elections.

While the elections are unlikely to have much impact on UK policy, they are likely to be seen as a litmus test for the Labour government.

The possibility of a weaker-than-expected performance by Labour looked to dampen GBP appeal, as it threatened to revive concerns over government unity in light of Conservative government infighting following previous local elections.

Turning to the end of the week, the spotlight will undoubtedly be on the latest US payroll figures.

The Pound US Dollar exchange rate may rally if April's payroll figures point to a cooling US labour market and stoke Federal Reserve interest rate cut expectations.

Sterling, meanwhile, is likely to take it cues from wider market trends, although the outcome of local elections could also influence GBP sentiment.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts