Pound-to-Dollar Forecast: GBP Advances vs USD on Slowing US Retail Sales

May 15, 2025 - Written by Frank Davies

STORY LINK Pound-to-Dollar Forecast: GBP Advances vs USD on Slowing US Retail Sales

The Pound US Dollar exchange rate gained ground on Thursday as the US released its latest retail sales index and the UK released its latest GDP reading.

At the time of writing, GBP/USD was trading at approximately $1.3300, up roughly 0.3% from the start of Thursday’s session.

The US Dollar (USD) weakened across the board on Thursday as markets reacted to discouraging retail sales figures from April.

Consumer spending growth nearly came to a halt last month, with the retail sales index slipping sharply from March’s 1.5% reading to just 0.1%, coming in only slightly above forecasts for flat growth.

This underwhelming performance added to growing concerns about the US’s economic outlook, especially on the back of Tuesday’s subdued inflation reading.

The US Dollar came under additional strain after data showed a surprise dip in producer prices for April, marking the first time producer inflation had fallen since 2023, and deepened worries about weakening inflationary momentum in the US economy.

As investor confidence waned, the Dollar faced renewed pressure and retreated against most major currencies.


The Pound (GBP) strengthened on Thursday following the release of upbeat UK growth figures for Q1 2025.

Official data from the Office for National Statistics (ONS) showed the economy expanded by 0.7% over the first three months of the year, exceeding forecasts and registering the strongest performance among the G7 nations.

The unexpected acceleration in growth helped bolster confidence in the UK’s economic outlook, lending support to Sterling during the day’s European trading session.

As the week draws to a close, attention for the GBP/USD exchange rate is expected to shift towards upcoming US economic data.

The University of Michigan’s preliminary consumer sentiment reading for May is due for release, with projections suggesting sentiment will remain subdued, hovering near the lowest levels since July 2022, as noted in last months report.

If the index holds at these levels, it could weigh on the US Dollar (USD) by further fuelling concerns over the resilience of the American economy.

Meanwhile, with no notable UK data scheduled for Friday, Sterling may struggle to find a clear trajectory, potentially leading to more subdued or directionless movement in the GBP/USD pairing.

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TAGS: Pound Dollar Forecasts