GBP/USD Forecast: Pound Sterling Remains "Neutral" as Nov Rally Stalls

Modified: Friday, 9 January 2026 08:01 BST - Written by James Fuller

STORY LINK GBP/USD Forecast: Pound Sterling Remains "Neutral" as Nov Rally Stalls

The Pound to US Dollar exchange rate (GBP/USD) edged lower on Thursday as a deterioration in global risk appetite encouraged investors to rotate back toward safer assets.

At the time of writing, GBP/USD was trading around $1.3437, down roughly 0.2% from the start of the session.

The US Dollar (USD) found modest support as demand for safe havens picked up amid a flare-up in geopolitical tensions.

Investor nerves were unsettled by several developments, including US military action in Venezuela, renewed rhetoric from Washington regarding Greenland, and the seizure of a Russian-flagged oil tanker. Together, these events heightened concerns about global stability and lifted demand for defensive currencies such as the US Dollar.

That said, gains in USD were capped as traders remained cautious ahead of key US data releases due on Friday, limiting the appetite for aggressive positioning.

The Pound (GBP) struggled to keep pace with safer currencies as the risk-off mood prevailed, with the absence of UK economic data leaving Sterling vulnerable to broader market swings.

Sentiment around the Pound was further dented by a recent Office for National Statistics survey suggesting that increased adoption of artificial intelligence is prompting some UK firms to cut staff numbers. The findings reinforced expectations that the UK labour market may continue to cool, adding another layer of pressure to Sterling.

Pound-to-Dollar Exchange Rate Forecast: Jobs Data in the Spotlight

Looking ahead, attention turns to Friday’s US non-farm payrolls report, which is likely to be the key driver for the Pound to US Dollar exchange rate.

Markets are forecasting job creation of around 60,000 in December — a result that would signal a cooling US labour market. Such an outcome would likely reinforce expectations for further Federal Reserve rate cuts and could undermine the US Dollar.

Conversely, a stronger-than-expected payrolls print may allow USD to claw back some ground, particularly if it tempers dovish rate-cut expectations.

Later in the session, the University of Michigan’s consumer sentiment index for January is also due. A modest improvement is expected, though confidence remains historically weak.

With no major UK data releases scheduled, movement in GBP/USD is set to remain closely tied to US economic data and shifts in global risk sentiment.

Analysts a Scotiabank commented, "the rally from November looks to have stalled as gains from the 1.30 have settled into a flat range roughly bound between 1.3400 and 1.3550.

"Bullish momentum has softened from overbought levels and the RSI is now hovering just above the neutral threshold at 50.

"We remain neutral absent a break below 1.3400 and note the importance of the 200 day MA at 1.3390. We look to a near-term range bound between 1.3400 and 1.3500."

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TAGS: Pound Dollar Forecasts