Modified: Friday, 24 October 2025 11:15 BST

– Written by


Frank Davies

STORY LINK Pound to Dollar FX Forecast: GBP “to Hold Above 1.32-1.3250”

The Pound to Dollar exchange rate (GBP/USD) firmed on Friday as GBP investors digested stronger-than-expected UK business activity figures ahead of the key US inflation report.

GBP/USD Forecasts: Recovers from 1-Week Lows

The Pound Sterling found support close to 1.3300 on Wednesday and bounced to around 1.3350 without making much headway.

UK equities were able to make further headway with the FTSE 100 index close to record highs in London trading.

According to UoB; “Downward momentum has eased with the rebound. Today, we expect GBP to trade sideways, most likely within a range of 1.3330/1.3380.”

HSBC commented; “The autumn budget on 26 November has the potential to significantly impact the economic and inflation outlook. For now, we expect GBP-USD to hold above key support levels at 1.32-1.3250.”

The dollar overall has held a firm tone in global markets with the yen under further pressure, although European currencies have shown some resilience.

There has been further very volatile trading in precious metals with gold attempting to recover from very sharp losses, but well below recent record highs.

HSBC commented; “the correction in the gold market may hint that the USD-debasement theme has come a little exhausted.”

The US official data releases have been severely curtained by the government shutdown with markets desperate for further information on the economy.

On Friday, the latest US consumer prices data will be released as well as the PMI business confidence data on both sides of the Atlantic.

ING commented on inflation data; “Based on yesterday’s price action, we reiterate our view that the dollar’s rebound is getting tired and probably requires some hawkish repricing to keep going. As discussed over the week, we don’t think tomorrow’s US CPI will offer that opportunity as we expect a consensus 0.3% MoM core print. But surely with 50bp of easing fully priced in by year-end, any hot print could offer good support to the dollar.”

Within the PMI data, evidence of jobs will be watched particularly closely.

Following Wednesday’s UK inflation data, there has been increased speculation that the Bank of England (BoE) could decide to cut interest rates again this year.

MUFG expects BoE caution will prevail; “We also suspect that policymakers will want to have some visibility on the Budget measures after this year’s increase in employer NICs contributed to the current hump in inflation.”

It did note the importance of UK data releases; “That said, the next BoE meeting would certainly become more live if there is a dire PMI and/or retail sales print on Friday, for example. That is conceivable if speculation around the upcoming Budget weighs on sentiment and spending.”

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TAGS: Pound Dollar Forecasts