Pound Sterling to Dollar Forecast: GBP Pushes Towards $1.36 Before UK GDP

Modified: Thursday, 11 September 2025 20:00 BST - Written by David Woodsmith

STORY LINK Pound Sterling to Dollar Forecast: GBP Pushes Towards $1.36 Before UK GDP

The Pound to Dollar exchange rate (GBP/USD) traded sideways on Thursday, as investors shrugged off an uptick in US inflation and kept their focus on upcoming central bank policy decisions.

At the time of writing, GBP/USD was trading at around $1.3552, largely unchanged from Thursday’s opening levels.

The US Dollar (USD) was steady on Thursday after the Bureau of Labor Statistics (BLS) confirmed consumer prices rose in line with forecasts.

Headline inflation quickened to 2.9% in August from 2.7%, while core inflation held firm at 3.1%. Although the figures highlight persistent price pressures, they largely met investors' expectations.

As a result, the data did little to shake expectations for monetary easing. Markets remain convinced that the Federal Reserve will lower rates by 25 basis points next week, with further cuts still being priced in for later this year.

The Pound (GBP) struggled to extend its recent gains on Thursday, with trading momentum dampened by ongoing fiscal uncertainty in the UK.

With domestic data thin on the ground, investors focused on speculation surrounding Chancellor Rachel Reeves’s upcoming autumn budget. Markets remain wary that the Chancellor may be forced to pursue tax rises or spending reductions to meet fiscal targets – moves that could weigh on the UK’s economic outlook.

Even so, the Pound found some underlying support from the Bank of England’s (BoE) recent hawkish tilt on interest rates, with GBP investors reluctant to abandon bets on tighter policy through the remainder of 2025.

Looking towards the end of the week, Sterling could face fresh headwinds with the release of the UK’s latest monthly GDP figures.

After June’s 0.4% monthly expansion, analysts expect July’s figures will show growth stalled – a result that may revive concerns over the UK’s economic momentum and drag Sterling lower.

On the other side of the pairing, the University of Michigan’s consumer sentiment index is due on Friday. If sentiment weakens, it could dent the US Dollar and offer GBP/USD some support heading into the weekend.

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TAGS: Pound Dollar Forecasts