Pound to Dollar Forecast: "Little Resistance Ahead of Upper 1.35 Area"

Published: Wednesday, 13 August 2025 08:30 BST - Written by David Woodsmith

STORY LINK Pound to Dollar Forecast: "Little Resistance Ahead of Upper 1.35 Area"

The Pound to Dollar (GBP/USD) exchange rate, which tested the 1.3400 support level on Monday, has extended its rebound after disappointing US inflation data.

Pound Sterling now trades at 1.35452, building on gains driven earlier in the week by stronger-than-expected UK jobs figures.

The British Pound was also underpinned by gains in equities with another rollover for the US-China trade talks helping to underpin global risk appetite.

MUFG commented; “Risks from trade disruption to both inflation and growth have eased further overnight after President Trump signed an executive order to extend the trade truce with China for another 90-days through to 10th November.”

A move GBP/USD move above 1.3480 would represent a 2-week high

According to UoB; “as long as 1.3365 is intact, there is still a chance for GBP to rise to 1.3515.”

Scotiabank commented; “We see little resistance ahead of the upper 1.35 area.”


The labour-market data recorded a decline in payrolls of 8,000 for July compared with expectations of around 25,000.

The June decline in payrolls was also revised to a decline of 26,000 from the flash reading of 41,000.

Given the trend for upward revisions, it is possible that the July figure will be revised to show a small increase in payrolls.

The unemployment rate held at 4.7% and close to 4-year highs.

MUFG commented; “The July figure was the strongest since January indicating that the weakness in the labour market maybe starting to ease a little although one should never place too much importance on just one report.”

According to the bank; “Overall, the report is unlikely to alter the current hawkish policy shift taking place on the MPC.”

The 10-year yield increased to above 4.60%, the highest reading since late July.


Higher yields will, in theory, support the Pound, although there will also be concerns over the impact on debt-servicing costs.

MUFG noted; “Higher UK yields for longer remains a supportive factor for the pound although it didn’t prevent recent pound underperformance.”

The latest US inflation data will be released later in the day. Consensus forecasts are for an increase in the headline inflation rate to 2.8% from 2.7% with expectations of a 0.3% increase in core prices nudging the annual rate to 3.0% from 2.9%.

Markets are currently pricing in around an 85% chance of a Fed rate cut at the September meeting.

ING expects a monthly core increase of 0.4% which could jolt these expectations.

According to the bank; “we think labour market data is more influential than inflation, given the consensus view that tariff-induced price shocks are transitory and last month’s large payroll revisions. So even a 0.4% MoM core print could still be consistent with a September cut – if accompanied by further labour market deterioration.”

TD Securities also expects that the importance of the labour market will limit the CPI impact.

Danske Bank maintains a negative dollar stance; “Fed leadership is likely to adopt a more dovish stance, while risks to central bank independence add further downside pressure on the greenback.”

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TAGS: Pound Dollar Forecasts