GBP/USD Price Forecast: Dollar Extends Payrolls Weakness, Pound Holds $1.35

Modified: Monday, 8 September 2025 17:15 BST - Written by David Woodsmith

STORY LINK GBP/USD Price Forecast: Dollar Extends Payrolls Weakness, Pound Holds $1.35

The Pound to US Dollar (GBP/USD) exchange rate edged higher at the start of the week, as the fallout from Friday’s weak US payrolls report continued to weigh on the Greenback.

At the time of writing, GBP/USD was trading at around $1.3522, up around 0.2% from Monday’s opening level.

The US Dollar (USD) remained under pressure on Monday as investors continued to absorb Friday’s disappointing non-farm payroll release.

The Bureau of Labor Statistics revealed just 22,000 jobs were added in August, compared to forecasts of 73,000. Adding to the gloom, June’s figure was revised lower to show a loss of 13,000 jobs.

The data has reinforced fears that the US labour market is rapidly losing momentum and fuelled speculation that the Federal Reserve will have to accelerate its easing cycle.

Markets are now pricing in rate cuts totalling at least 75 basis points, while odds of a 50bps move this month have climbed to around 10%.

Sterling was largely stable at the start of the week, with investors showing little reaction to Prime Minister Keir Starmer’s cabinet reshuffle following the departure of Deputy Prime Minister Angela Rayner.

Concerns over fiscal stability were eased somewhat by the decision to retain Rachel Reeves as Chancellor, which may also have helped limit volatility in the bond market after last week’s turbulence.

Meanwhile, lingering expectations that the Bank of England (BoE) will maintain a cautious stance on interest rate cuts helped underpin the Pound.

GBP/USD Forecast: Payroll Revisions to Drive Fresh Dollar Losses?

Looking forward, the release of the annual revision to non-farm payrolls on Tuesday could put the US Dollar back under heavy pressure.

Early estimates suggest payrolls for 2025 may be revised down by as much as 800,000, which would deal another blow to confidence in the strength of the US jobs market. Such a result could prompt traders to ramp up bets on a larger Fed rate cut this month.

That said, the Dollar may find some support as investors turn their attention towards this week’s US inflation report.

With no significant UK data scheduled over the next couple of days, Sterling’s movements are likely to remain largely dictated by global sentiment and shifts in Dollar demand.

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TAGS: Pound Dollar Forecasts