GBP/USD Forecast: Pound Sterling Climbs to $1.352 as Shutdown Pressures Greenback

Modified: Wednesday, 1 October 2025 22:15 BST - Written by James Fuller

STORY LINK GBP/USD Forecast: Pound Sterling Climbs to $1.352 as Shutdown Pressures Greenback

The Pound to US Dollar (GBP/USD) exchange rate strengthened on Wednesday as the Dollar was hobbled by a US government shutdown and some underwhelming data releases.

At the time of writing, GBP/USD was trading at approximately $1.3521, up roughly 0.6% from the start of Wednesday’s session.

The US Dollar (USD) weakened through Wednesday’s European session, coming under sustained pressure amid renewed political and economic concerns.

In early trade, the ‘Greenback’ was undermined by market jitters surrounding the US government shutdown, which dampened investor confidence in the currency.

Losses deepened later in the day following the release of disappointing US data.

September’s ADP employment change slumped sharply, dropping from -3k to -32k, in stark contrast to forecasts of a 50k increase.

Meanwhile, although the ISM manufacturing PMI exceeded expectations, the index remained below the 50-point threshold, signalling continued contraction in the sector.

Together, the data compounded selling pressure on USD, leaving the currency broadly weaker by the close of mid-week trade.

The Pound (GBP) traded in a relatively steady fashion against most of its peers during Wednesday’s European session, despite the release of underwhelming domestic data.

The UK’s latest manufacturing PMI for September, while less closely watched than the services index, remained an important gauge of industrial performance.

The reading fell from 47.0 to 46.2, extending deeper into contraction territory, though it broadly aligned with market expectations.

Even with the weaker data, GBP held its ground, supported by a generally upbeat market mood, as the day’s risk-on sentiment helped the increasingly risk-sensitive Sterling maintain stability throughout Wednesday’s trading session.

GBP/USD Forecasts: US Shutdown to Fuel Fresh Volatility?

Looking ahead to Thursday’s European session, the GBP/USD exchange rate may continue to find support as investor focus remains on the ongoing US government shutdown.

With the closure disrupting scheduled economic publications, key releases such as the latest initial jobless claims and factory orders will not be published.

The absence of this data could keep the ‘Greenback’ under pressure, as uncertainty over the political situation in the US weighs on sentiment.

On the UK side, no major domestic releases are due on Thursday’s calendar.

As a result, Sterling may lack fresh direction of its own, leaving GBP exchange rates vulnerable to shifts in broader market sentiment and external developments.

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TAGS: Pound Dollar Forecasts