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• The GBP/USD currency pair climbed back above the 1.2400 handle on Friday.
• Markets pivoted into a cautiously risk-on stance to end the week.
• UK data broadly missed the mark on Friday, while US PMI figures beat the street.

The GBP/USD currency pair found a thin recovery on Friday, as it gained roughly four-tenths of one percent and ended the first trading week of 2025 back above the 1.2400 handle.

UK macroeconomic and consumer credit data broadly missed the mark early on Friday, but the low-tier figures barely registered on the needle. On the US side, US business activity survey results helped to keep investor sentiment on the hopeful side and risk appetite on the high side.

US ISM Manufacturing Purchasing Managers Index (PMI) activity surveys came in higher than expected for December, climbing to 49.3 versus the expected stall at 48.4. This is the highest print in the key manufacturing activity indicator in nine months. 

However, not all is rosy in the manufacturing outlook. The ISM Manufacturing Employment Index and the ISM Manufacturing Prices Paid index prints in December both missed expectations, implying producer-level inflation is still rising beneath the surface and businesses are still trimming more jobs than expected.

Coming up next week, the UK will continue the trend of having little to no meaningful data on the economic release calendar; everything on the pound side of the data docket will be strictly low-impact releases.

On the US side, American markets and institutions will be taking Thursday off in observation of the passing of former President Jimmy Carter, who died on Dec. 29 at the age of 100. Friday will then follow up with the first US Nonfarm Payrolls (NFP) print of 2025.

GBP/USD Price Forecast

Despite the pair’s last-minute bullish push to muscle bids back over the 1.2400 handle, the pair ended the first trading week of the year on a bearish note. The GBP/USD currency cross moved down 1.3% for the week, and it appeared poised for an extended drop to 2024’s lows near the 1.2300 mark.

Price action still favored the low side of things as the 50-day (1.2685) and 200-day (1.2785) Exponential Moving Averages (EMA) extended a bearish cross, which seemed to keep a technical ceiling on any bullish attempts. 

GBP/USD Daily Chart

(Click on image to enlarge) 

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