Pound-to-Dollar Forecast: US Claims Data Supports USD Pressuring GBP

Modified: Friday, 9 January 2026 16:46 BST - Written by Frank Davies

STORY LINK Pound-to-Dollar Forecast: US Claims Data Supports USD Pressuring GBP

The Pound to Dollar exchange rate (GBP/USD) slipped back as investors waited for crucial US labour-market data that could shape Federal Reserve rate expectations.

With the dollar finding support, the pound struggled to attract fresh demand.

GBP/USD Forecasts: Edging Lower

The Pound to Dollar rate has continued to drift lower with a retreat to 1.3420 after Thursday’s New York open.

The latest US jobs data has not triggered fresh fears over the outlook, preventing any fresh selling, while a slightly weaker risk tone has undermined the Pound in global markets.

There is an element of caution ahead of Friday’s US jobs data.

Even if there is no drama from the jobs data, official US announcements could still have a substantial impact on currency rates.

According to UoB; “The downside risk appears to be building but currently, we expect any weakness to be part of a lower range of 1.3400/1.3535. Looking ahead, if GBP breaks clearly below 1.3400, it could then trigger a more sustained and sizeable drop.”

US data releases will continue to watched closely with a particular focus on the jobs market.

The monthly US jobs report is due on Friday. Consensus forecasts are for an increase in non-farm payrolls of around 65,000, similar to the increase for last month while the unemployment is expected to edge lower to 4.5% from the 4-year high of 4.6%.

There is still the risk of distortions from the US government shutdown.

MUFG commented; “Tomorrow’s NFP report would have to be much weaker than expected to prompt a fourth consecutive rate cut and trigger a sharp reversal of recent US dollar gains.”

The latest Challenger data recorded an annual decline in layoffs of 8.3% for December.

Challenger commented; “The year closed with the fewest announced layoff plans all year. While December is typically slow, this coupled with higher hiring plans, is a positive sign after a year of high job cutting plans.”

Markets are now pricing in less than a 10% chance that the Fed will cut rates at the January meeting with the potential for a March cut dipping to around 40%.

MUFG considered the medium-term outlook; “Our updated FX forecasts released in yesterday’s Annual Outlook report revealed that the we expect the US dollar to hold up better at the start of this year before weakening further as the year progresses.”

Markets are also wary over a potential Friday Supreme Court announcement on the legality of reciprocal tariffs while there is also the possibility that President Trump will announce his nomination for the next Fed Chair.

ING commented on the tariffs judgement; “Consensus is leaning towards a negative ruling, which could prompt some USD strengthening. That’s because the tariff impact has been more marked on the jobs market than on inflation, and the reaction could see some hawkish repricing in the Fed curve.”

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TAGS: Pound Dollar Forecasts