Pound-to-Dollar Forecast: Mixed US Labour Data Keeps USD Soft, GBP Stabilises

Published: Friday, 21 November 2025 08:00 BST - Written by Frank Davies

STORY LINK Pound-to-Dollar Forecast: Mixed US Labour Data Keeps USD Soft, GBP Stabilises

The Pound to Dollar exchange rate (GBP/USD) dipped to 2-week lows below 1.3050 in early Europe on Thursday before rallying to 1.3090. A mixed US labour-market report failed to resolve the debate whether the Fed will cut rates again in December with the dollar paring net gains.

GBP/USD Forecasts: Support Remains at 1.3000 Level

UoB commented; “deeply oversold conditions suggest it is unlikely to break below the major support at 1.3000.”

It added; “A breach of 1.3105 would indicate that the weakness in GBP is stabilising.”

According to the delayed US labour-market report for September, there was an increase in non-farm payrolls of 119,000 compared with consensus forecasts of around 55,000. There was, however, a revised 4,000 decline for August compared with the flash reading of a 22,000 increase.

The household survey recorded an increase in the unemployment rate to a 4-year high of 4.4% from 4.3% due in part to a significant increase in the labour force.

Federal Reserve minutes from October’s meeting reported that several members backed a further rate cut at the December meeting. There were, however, clear divisions with many considering that it would be difficult to justify a further move.

The limited data releases have not suggested further serious deterioration in the labour market which will maintain notable doubts within the Fed committee that rates should be cut again next month.

The BLS has also announced that the October and November jobs figures will be combined and not released until December 16th, after the next Fed meeting.

MUFG commented; “The lack of clarity over the health of the labour market in October and November could tip the balance in favour of the Fed taking a more cautious approach and leaving rates on hold in December.”

There will still be multiple factors in play.

According to Scotiabank; “If the Fed does hold next month, pressure for a more aggressive, “catch up” move in Jan could rise if the Oct and Nov jobs reports are weak.”

Domestically, the CBI industrial trends survey improved only marginally to –37 from –38 the previous month and below consensus forecasts of –31.

CBI Lead Economist Ben Jones commented; “Manufacturers face a challenging end to the year. What’s striking in this month’s survey is how consistently firms link the slowdown to uncertainty ahead of the Budget.”

Speculation over the content of the budget will be a key focus ahead of Wednesday's House of Commons release and is likely to limit net Pound support.

According to ING; “The pound is trading with a moderate risk premium that appears likely to remain in place until the Budget announcement on 26 November, as the government's U-turn on income tax hikes has added a layer of uncertainty and unnerved bond investors.”

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TAGS: Pound Dollar Forecasts