Pound to US Dollar Forecast: Long-term GBP/USD Uptrend Faltering Again?

July 25, 2025 - Written by Frank Davies

STORY LINK Pound to US Dollar Forecast: Long-term GBP/USD Uptrend Faltering Again?

The Pound to Dollar (GBP/USD) exchange rate pushed to a peak just below 1.3590 before a retreat to near 1.3550.

The latest UK data triggered some fresh unease over the outlook and hampered the Pound, but dollar confidence remained weak amid signs of higher inflation which would intensify the debate surrounding Federal Reserve policy.

Scotiabank considers that the long-term GBP/USD uptrend could be faltering again and added; “We look to a near-term range bound between 1.3500 support and 1.3580 resistance.”

According to UoB; “Although the outlook for GBP remains positive, short-term conditions are deeply overbought, and the next resistance at 1.3650 is unlikely to come into view so soon.”

On a longer-term view, Danske Bank expects that GBP/USD will creep higher to 1.38 on a 12-month view.

As far as UK data is concerned, the UK PMI manufacturing index edged higher to a 6-month high of 48.2 for July from 47.7 previously and just above consensus forecasts.

The services-sector index, however, dipped to a 2-month low of 51.2 from 52.8 in June and compared with expectations of no change for the month.


The CBI industrial trends index improved slightly to -30 for July from -33 previously, but this was below consensus forecasts of -27 and indicated further stresses in the manufacturing sector.

The ONS also reported that UK vehicle production in the first half of 2025 slumped to the lowest level since 1953.

The issue of US interest rates and Fed independence will remain a key market concern.

Markets remain very confident that there will be no change in interest rates at next week’s meeting and the potential for a September rate cut has also drifted lower to near 35%.

There are still important concerns surrounding political pressure on the Fed with the future of Chair Powell still a major talking point.

There has been further speculation that the Administration will find a pretext to dismiss Powell or undermine his authority.

Rabobank commented; “Later today, Trump will visit the Fed to take a look at the construction site where the $2.5 billion renovation project is taking place that could become the “cause” that the Trump administration is looking for to fire Powell if they want to get rid of him before his term as Fed Chair expires in May 2026. That should certainly move the process to find a new Chair into high gear.”


The latest US data will complicate the argument surrounding Federal Reserve policy and Administration demands for lower interest rates.

The PMI manufacturing index dipped to a 7-month low of 49.5 for July from 52.9 and below consensus forecasts of 52.7.

The services-sector index, however, increased to a 7-month high of 55.2 from 52.9 in June.

Overall business confidence dipped again with the second-weakest reading for 30 months.

Costs increased at the second-highest rate since January 2023 while output charges increased at the second-highest rate since September 2022.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence noted a strong start to the third quarter, but commented; “Whether this growth can be sustained is by no means assured. Growth was worryingly uneven and overly reliant on the services economy.”

On inflation, he added; “The rise in selling prices for goods and services in July suggests that consumer price inflation will rise further above the Federal Reserve’s 2% target in the coming months as these price hikes feed through to households.”

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TAGS: Pound Dollar Forecasts