June 20, 2025 – Written by David Woodsmith
STORY LINK Pound to Dollar Rate “Neutral-Bullish” Following BoE Rate Hold
The Pound US Dollar exchange rate was trapped in a narrow range on Thursday as the Bank of England (BoE) delivered its latest interest rate decision.
At the time of writing, GBP/USD was trading at approximately $1.3433, virtually unchanged from the start of Thursday’s session.
The Pound (GBP) rallied against the Australian Dollar (AUD) and New Zealand Dollar (NZD) on Thursday, supported by a downbeat market mood.
However, elsewhere, Sterling saw limited movement following the Bank of England’s latest policy announcement.
As expected, the BoE held interest rates at 4.25%, but the decision was not unanimous. Three of the nine Monetary Policy Committee (MPC) members voted in favour of a cut.
The bank’s accompanying commentary also flagged growing concerns over slowing economic growth and a weakening labour market.
Despite these dovish signals, the Pound held broadly steady against most major peers as the rate hold was largely priced in, and inflation remains well above the BoE’s 2% target.
The US Dollar (USD) advanced against most of its peers on Thursday, buoyed by a combination of hawkish Federal Reserve signals and a risk-off market sentiment.
On Wednesday evening, the Fed held interest rates steady as expected, and scaled back its rate cut projections, bolstering demand for the ‘Greenback’.
Adding to USD strength, a cautious tone persisted in markets on Thursday amid ongoing concerns over Middle East tensions, prompting investors to favour safe-haven assets and further supporting the US Dollar during the European session.
Looking ahead to Friday, the Pound US Dollar (GBP/USD) exchange rate is likely to be driven by the UK’s latest retail sales figures.
May’s reading is forecast to show a sharp decline in consumer spending, with monthly sales expected to contract by 0.6% following April’s 1.2% rise.
If confirmed, the disappointing data could weigh on GBP sentiment, reinforcing concerns over the UK’s economic outlook and dragging the Pound lower.
Meanwhile, with no major US data releases scheduled for Friday, the US Dollar is expected to remain sensitive to broader market mood.
Should risk appetite improve, the ‘Greenback’ may struggle to hold onto its recent gains.
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TAGS: Pound Dollar Forecasts
