GBP/USD Price Forecast: Dollar Pressured as Weak Jobs Data Lifts Sterling

Modified: Thursday, 4 September 2025 17:30 BST - Written by Tim Boyer

STORY LINK GBP/USD Price Forecast: Dollar Pressured as Weak Jobs Data Lifts Sterling

The Pound to US Dollar (GBP/USD) exchange rate traded sideways on Thursday as markets digested the latest US labour market indicators.

At the time of writing, GBP/USD was hovering around $1.3430 – virtually unchanged from the session open.

The US Dollar (USD) struggled to find momentum on Thursday following the release of August’s ADP employment report.

The data showed that US firms added just 54,000 new jobs in August, well below the 65,000 that had been forecast and sharply down from July’s 104,000.

The result underscores the slowdown gripping the US labour market and has increased expectations that the Federal Reserve will be compelled to loosen monetary policy through several rate cuts in the months ahead.

The Pound (GBP) found stability on Thursday as UK bond markets calmed after recent turmoil.

Yields on 30-year gilts eased back to 5.58%, down from a 27-year peak of 5.75% reached on Wednesday.

The retreat eased some investor fears that surging borrowing costs would leave Chancellor Rachel Reeves with little choice but to impose deeper tax hikes and spending cuts in the autumn budget.

Sterling was also supported by recent comments from Bank of England (BoE) Governor Andrew Bailey, who reaffirmed a more hawkish outlook on interest rate cuts.

All eyes now turn to Friday’s non-farm payroll release, which is expected to provide the next major test for the Pound to US Dollar (GBP/USD) exchange rate.

If payrolls echo the weakness seen in the ADP report, the data could deepen concerns over the resilience of the US jobs market and spark a sharp selloff in the ‘Greenback’.

Meanwhile, UK retail sales figures could present a challenge for Sterling on Friday morning. Economists expect a slowdown in consumer spending last month, which may reignite worries about the UK’s growth outlook and limit GBP upside.

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TAGS: Pound Dollar Forecasts