GBP/USD Price Forecast: Pound Climbs as US Scales Back Trade Goals

July 1, 2025 - Written by Ben Hughes

STORY LINK GBP/USD Price Forecast: Pound Climbs as US Scales Back Trade Goals

The Pound to US Dollar exchange rate (GBP/USD) maintained a positive trajectory on Tuesday, with the pairing propelled to a new multi-year high.

At the time of writing, GBP/USD was trading at approximately $1.3771, up around 0.3% from Tuesday’s opening levels.

The US Dollar slipped on Tuesday following reports that the Trump administration is narrowing the scope of its trade negotiations.

Rather than pursuing a comprehensive set of international trade agreements by the 9 July deadline, US officials are now said to be aiming for more limited bilateral deals.

This apparent shift helped to boost market confidence and eased safe-haven demand for the US Dollar.

Additional downward pressure on USD exchange rates was then driven by speculation that a reduction in trade friction could lead the Federal Reserve to consider cutting rates sooner rather than later.

Although the Pound (GBP) strengthened during Tuesday’s European session, its ascent was checked by comments from Bank of England (BoE) Governor Andrew Bailey.


In an interview ahead of his speech at the European Central Bank’s annual Sintra forum, Bailey acknowledged that the UK labour market is showing signs of weakness and suggested that the path for interest rates remains downward.

These remarks reinforced expectations that the BoE will implement another rate cut in August, limiting the Pound’s upward momentum.

Looking to the days ahead, the focus will shift to Thursday's non-farm payrolls report, which could drive significant movement in the GBP/USD exchange rate.

Economists predict US job growth slowed to just 110,000 in June, a figure that, if confirmed, would likely cement expectations for a Fed rate cut later this summer and add to pressure on the US Dollar.

Further weakness in the ISM PMIs could reinforce concerns about the resilience of the US economy.

Meanwhile, with a quiet UK data calendar, Pound movement will likely remain at the mercy of broader risk trends and the market’s evolving outlook on BoE policy.

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TAGS: Pound Dollar Forecasts