Pound to Dollar Forecast: "The Bull Trend has Faltered"

July 18, 2025 - Written by Frank Davies

STORY LINK Pound to Dollar Forecast: "The Bull Trend has Faltered"

Following the latest UK jobs data, fears over severe labour-market deterioration were scaled back, which helped cushion the Pound in global markets.

The Pound to Dollar (GBP/USD) exchange rate held just above 8-week lows of 1.3365 and traded just above 1.3400 after the New York open.

Markets remain nervous over the threats to Fed Chair Powell after the brief dollar-selling frenzy seen on Wednesday which saw a blink and you miss it GBP/USD spike to 1.3480.

According to UoB; “Despite the sharp fluctuations, the current price movements are likely part of a consolidation phase. Expected range for today: 1.3360/1.3460.”

Scotiabank commented; “the bull trend has faltered on this week’s break of the 50 day MA (1.3505), and the RSI’s plunge into (sub-50) bearish territory has been notable.”

From a longer-term view UoB added; “GBP/USD is likely to remain under pressure, but it is too early to expect a decline toward May’s low of 1.3140.”

The latest UK labour-market data recorded a provisional 41,000 payrolls decline for June, but the May decline was revised to 25,000 from 109,000 reported previously.


ING commented; “Employment is down by almost a percentage point since October with more than half of the net job losses coming from hospitality or wholesale/retail. These are labour-intensive, lower-paid sectors which were more vulnerable to April’s National Insurance increase.”

It added; “The fact that these sectors are dominated by small businesses may explain why it’s not showing up in the redundancy data.”

The payrolls revision was significant and dampened expectations of more aggressive Bank of England rate cuts.

According to Scotiabank; “The latest employment release was broadly positive, with stronger than expected employment change. Markets are still pricing nearly one full 25bpt cut for the next meeting in August, but have softened their expectations for easing by year end.”

ING added; “the combination of less worrisome jobs data and hotter inflation figure yesterday, suggests the bar for the Bank of England accelerating cuts is still high. We expect cuts in August and November, and two further cuts next year.”

Deutsche Bank’s chief UK economist Sanjay Rana commented; "Today’s labour market report continues to paint a picture of a loosening jobs market. That said, the labour market picture looks better than it did last month."

The UK 10-year yield is trading around 4.65% from just below 4.50% at the beginning of July.


XTB’s Kathleen Brooks sees evidence of a dip in confidence; “Rising yields suggest that bond investors might be starting to shun the UK after economic data released in recent days paints an ugly picture of the UK economy.”

She is also downbeat on the economy; “Falling GDP, rising inflation and a weak labour market could trigger more underperformance of the UK bond market compared to our peers over the rest of the summer.”

US data releases were firm, but markets were still fretting that President Trump would look to dismiss Fed Chair Powell on the pretext of mishandling the Fed renovation project.

According to Monex Senior Director of Trading Juan Perez; “What can kill the value of the U.S. dollar, what can absolutely destroy faith in the U.S. dollar, is attacking in any way, shape, or form the independence and authority of the Federal Reserve.”

SocGen Head of Corporate Research Kenneth Broux added; "This story keeps churning so understandably markets are nervous that it could happen sooner rather than later re Trump firing Powell. Bond and FX markets do not like the uncertainty.”

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TAGS: Pound Dollar Forecasts