GBP/USD Forecast: Pound Sterling "Mid Performer" Following US, UK PMIs

May 23, 2025 - Written by Ben Hughes

STORY LINK GBP/USD Forecast: Pound Sterling "Mid Performer" Following US, UK PMIs

The Pound-to-Dollar exchange rate (GBP/USD) was rangebound on Thursday following the release of the US’s and UK’s preliminary S&P Global PMIs.

At the time of writing, GBPUSD was trading at approximately $1.3425, virtually unchanged from the start of Thursday’s session.

The US Dollar (USD) advanced against most major peers on Thursday, supported by stronger-than-expected PMI data for May.

Fresh figures from S&P Global revealed an uptick in both the manufacturing and services sectors, surprising markets who had projected a slowdown.

Manufacturing activity jumped to 52.3, defying expectations of a decline to 50.1, while the services PMI also rose to 52.3, indicating a broad-based expansion.

Commenting on the data, S&P’s Chris Williamson noted an encouraging rebound in business sentiment, crediting the easing of tariff pressures for lifting outlooks.

The upbeat economic data boosted confidence in the US economy and helped lift the ‘Greenback’ against a range of currencies, although gains against the Pound were more limited.


Sterling traded steadily on Thursday, and even rose against several of its counterparts, following the release of the UK’s latest PMI readings for May.

Although manufacturing activity remained in contraction, with the index edging down to 45.1, the services sector surprised to the upside.

The services PMI climbed back above the 50 threshold, exceeded economists’ expectations by hitting 50.2, and signalled a return to modest growth.

This glimpse of resilience in the UK’s dominant services industry offered some reassurance to markets, helping the Pound maintain its footing during Thursday’s European session.

"GBP is down 0.2% vs. the USD and a mid-performer among the G10, trading relatively well despite a generally disappointing preliminary PMI release. The manufacturing print disappointed with a relatively deep contractionary print of 45.1 while services climbed just above the expansion threshold, printing 50.2." - Scotiabank

The Pound US Dollar (GBP/USD) exchange rate could come under pressure on Friday, with investors eyeing the UK’s latest retail sales data for direction.

April’s figures are expected to indicate a slowdown in consumer activity, with sales growth forecast to ease from 0.4% to 0.2%.


Any downside surprise could sour sentiment towards Sterling by fuelling concerns about the UK economy.

Meanwhile, with a quiet end to the week for US economic releases, the spotlight may shift to a scheduled speech from a Federal Reserve policymaker.

If the remarks lean dovish, the US Dollar could extend its recent losses, adding another layer of volatility to the currency pair heading into the weekend.

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TAGS: Pound Dollar Forecasts