Pound Sterling Forecast: GBP/USD Drifts at $1.35 Before Inflation Data

Modified: Wednesday, 10 September 2025 17:15 BST - Written by Tim Boyer

STORY LINK Pound Sterling Forecast: GBP/USD Drifts at $1.35 Before Inflation Data

The Pound US Dollar (GBP/USD) exchange rate moved without clear direction on Wednesday, with muted trading reflecting the absence of UK economic releases and caution ahead of US inflation figures.

At the time of writing, GBP/USD was trading at $1.3535, little changed from the previous session.

The Pound (GBP) was subdued on Wednesday, with Sterling lacking momentum in the absence of fresh UK economic releases.

Despite a broadly upbeat mood across global markets, the Pound struggled to make headway against the US Dollar (USD). While the ‘Greenback’ often benefits from safe-haven demand and Sterling tends to track shifts in risk appetite, the UK currency failed to draw support from the improved investor outlook.

Lingering unease over Chancellor Rachel Reeves’s upcoming autumn budget likely played a role in curbing GBP strength. UK government bond yields ticked higher during the session, reflecting investor caution as fiscal policy uncertainty continues to weigh on Sterling.

The US Dollar traded sideways on Wednesday, with the safe-haven ‘Greenback’ holding its ground despite a brighter market mood.

Caution among investors appeared to limit USD movement, as traders opted against making big shifts ahead of Thursday’s US consumer price index. The inflation report is expected to be a key driver for the Dollar, shaping expectations for future Federal Reserve policy.

GBP/USD Exchange Rate Forecast: Could Hotter US Inflation Buoy the Dollar?

All eyes turn to Thursday’s release of the US consumer price index, with forecasts pointing to inflation quickening from 2.7% to 2.9% in August. Such an outcome may scale back expectations for swift interest rate cuts from the Federal Reserve, providing a potential boost to the US Dollar.

Should CPI land in line with predictions, the ‘Greenback’ could firm as markets rein in bets on aggressive policy easing.

With no major UK data due until Friday, GBP/USD is likely to take its cue from the American release. At the end of the week, UK GDP figures for July are in focus. Growth is forecast to have stalled at the start of the third quarter, which may add pressure on Sterling.

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TAGS: Pound Dollar Forecasts