Pound to Dollar Price Forecast: Jobless Claims Final Test for USD in 2025

Modified: Tuesday, 30 December 2025 20:31 BST - Written by Ben Hughes

STORY LINK Pound to Dollar Price Forecast: Jobless Claims Final Test for USD in 2025

The Pound to US Dollar exchange rate (GBP/USD) traded sideways on Tuesday as subdued end-of-year conditions kept price action tightly constrained.

At the time of writing, GBP/USD was trading around $1.3518, little changed from its opening level.

The US Dollar (USD) struggled to establish a clear direction on Tuesday, trading unevenly against most major peers as thin year-end liquidity magnified the impact of competing market forces.

A modest improvement in risk appetite acted as a drag on the safe-haven Dollar. While concerns persist over sluggish global growth and lingering geopolitical risks heading into 2026, investors appear cautiously optimistic that Federal Reserve interest rate cuts and renewed hopes of progress towards peace in Ukraine could support economic activity and risk assets.

That said, losses in the US Dollar were limited by a small rise in US Treasury yields. The uptick in yields provided the ‘Greenback’ with some underlying support, helping to offset pressure from the slightly more positive market mood.

The Pound (GBP) also lacked direction on Tuesday, with a sparse UK data calendar and holiday-thinned trading conditions keeping Sterling rangebound.

A mildly constructive market backdrop offered some tentative support to the increasingly risk-sensitive Pound. However, the improvement in sentiment failed to generate sustained momentum, with traders largely remaining on the sidelines as the year drew to a close.

GBP/USD Exchange Rate Outlook: US Jobless Claims and Risk Appetite to Drive Movement

Looking ahead, the final potentially market-moving US data release of 2025 comes in the form of initial jobless claims for the week ending 27 December.

Economists expect a modest rise in new claims, which could place some pressure on the US Dollar by reinforcing the view that the US labour market is gradually losing momentum and keeping Federal Reserve rate cut expectations alive.

Beyond the data, broader market sentiment is likely to be the dominant driver for GBP/USD. The US Dollar typically benefits from risk aversion, while the Pound has become increasingly sensitive to shifts in investor confidence.

If markets close the year on an upbeat note — perhaps fuelled by optimism around a Russia–Ukraine peace plan and expectations of further Fed easing — Sterling could edge higher as USD softens. Conversely, a more cautious or defensive tone into the end of 2025 may allow the US Dollar to regain ground against the Pound.

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TAGS: Pound Dollar Forecasts