GBP to USD Forecast: Sterling Pressured by Weak UK PMI, Upbeat US Labour Figures

July 24, 2025 - Written by Frank Davies

STORY LINK GBP to USD Forecast: Sterling Pressured by Weak UK PMI, Upbeat US Labour Figures

The Pound US Dollar exchange rate lost ground on Thursday following the release of the UK’s latest PMI data and the US’s initial jobless claims and PMIs.

At the time of writing, GBP/USD was trading at approximately $1.3539, down roughly 0.3% from the start of Thursday’s session.

The Pound (GBP) stumbled against its peers on Thursday as lacklustre UK PMI data for July weighed heavily on the currency.

Although the manufacturing sector showed a modest improvement, with the index rising from 47.7 to 48.2, it remained stuck in contraction territory (a reading below 50), and failed to inspire investor confidence.

However, it was the disappointing services PMI that proved most damaging to Sterling on Thursday.

As the UK’s largest economic sector, services play a vital role in shaping overall growth.

July’s flash reading unexpectedly dropped to 51.2 from 52.8, falling short of the projected uptick to 53, and sparked concerns about slowing momentum in the economy.


This underwhelming performance prompted traders to increase bets on an interest rate cut from the Bank of England (BoE), a shift in sentiment that saw GBP retreat across the board as the session progressed.

The US Dollar (USD) advanced against several major peers on Thursday, buoyed by stronger-than-expected labour market data.

Initial jobless claims dipped to 217,000 in the week ending 19 July, beating expectations for a rise to 227,000.

The decline signalled ongoing resilience in the US jobs market and lent early support to the ‘Greenback’.

Later in the day, the US published its latest S&P Global flash PMIs for July.

The services index surprised to the upside, jumping from 52.9 to 55.2 and suggested solid momentum in the service sector.

However, gains were tempered by a weaker manufacturing print, which fell into contraction territory for the first time this year, slipping to 49.5 against forecasts of 52.6.


Despite the mixed PMI release, the US Dollar maintained its positive footing throughout the remainder of the session.

Looking ahead to Friday, movement in the GBP/USD exchange rate is likely to be shaped by a pair of key economic releases from the UK and the US.

For the UK, focus will fall on June’s retail sales figures.

Economists are forecasting a rebound, with sales expected to rise by 1.2% following the sharp 2.7% contraction seen in May.

A strong print would suggest that consumer activity is picking up, which may boost confidence in the UK’s economic outlook and lend support to the Pound heading into the weekend.

Across the Atlantic, the spotlight will be on the US’s latest durable goods orders.

After a sharp jump in May, orders are forecast to slump by 10.8% in June.

If the data matches expectations, it could weigh heavily on the US Dollar by fuelling concerns about a slowdown in broader economic momentum.

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TAGS: Pound Dollar Forecasts