Pound-to-Dollar Forecast: GBP Struggles amid Trade Tensions and Powell Focus

Modified: Monday, 13 October 2025 23:45 BST - Written by Tim Boyer

STORY LINK Pound-to-Dollar Forecast: GBP Struggles amid Trade Tensions and Powell Focus

The Pound US Dollar (GBP/USD) exchange rate dipped on Monday despite heightened tensions over US-China trade negotiations.

At the time of writing, GBP/USD was trading at approximately $1.3334, down roughly 0.2% from the start of Monday’s session.

The US Dollar (USD) showed a mixed performance at the start of the week, as markets reacted to evolving trade rhetoric from US President Donald Trump.

Last Friday, the Dollar came under pressure after Trump announced plans to impose 100% tariffs on Chinese imports, which sparked market concerns.

Although over the weekend he softened his stance, the Dollar continued to experience some weakness against several of its key rivals during Monday’s European session.

Despite this, USD found support against other safe-haven currencies, such as the Euro (EUR) and Japanese Yen (JPY), which were themselves volatile at the start of the week.

As a result, the Dollar managed modest gains against these peers as well as against the Pound (GBP).

The Pound (GBP) also fluctuated at the start of the week, moving unevenly against most of its major peers in the absence of any significant UK economic data.

With no domestic drivers to guide market direction, Sterling’s performance was largely dictated by broader risk sentiment, leaving GBP exchange rates without a clear trajectory.

Investor caution ahead of Tuesday’s UK jobs report also contributed to the quiet trading environment, as markets held back from making aggressive bets on the Pound.

As such, the Pound closed Monday with a mixed performance, gaining against some currencies while slipping against others, reflecting an overall lack of direction at the start of the week.

GBP/USD Forecast: UK Jobs Data and Powell Speech to Steer Direction

Looking ahead to Tuesday’s European session, the GBP/USD exchange rate is likely to be influenced by key UK developments.

Investor focus in the UK will be on the latest labour market report, which is expected to deliver a mixed outcome. While unemployment is forecast to remain steady, wage growth is projected to ease.

If the data aligns with expectations, Sterling could come under pressure, as slowing wage growth may temper hopes of a more hawkish stance from the Bank of England (BoE).

Across the Atlantic, attention will turn to a speech from Federal Reserve Chair Jerome Powell.

With the US lacking any major economic releases on Tuesday, Powell’s remarks could heavily influence the Dollar.

Any dovish signals on future monetary policy may keep the ‘Greenback’ under pressure, adding further volatility to the GBP/USD exchange rate during Tuesday’s European session.

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TAGS: Pound Dollar Forecasts