GBP/USD Forecast: Pound Sterling Lacks Momentum Ahead of US Jobs

Modified: Monday, 2 February 2026 21:01 BST - Written by Ben Hughes

STORY LINK GBP/USD Forecast: Pound Sterling Lacks Momentum Ahead of US Jobs

The Pound to US Dollar exchange rate (GBP/USD) traded in a narrow range on Monday, with an upbeat revision to the UK’s final manufacturing PMI failing to generate meaningful momentum for Sterling.

At the time of writing, GBP/USD was trading at $1.3699, edging only marginally above opening levels as markets largely shrugged off the data.

The US Dollar (USD) was broadly steady at the start of the week, pausing after the rebound it mounted late on Friday.

The ‘Greenback’ had slumped to multi-year lows last week before finding support after US President Donald Trump confirmed Kevin Warsh as his pick for Federal Reserve Chair. Warsh is widely viewed as the most market-friendly of the potential nominees, helping to spark a sharp recovery in USD demand.

That momentum, however, faded on Monday. While Warsh’s nomination eased concerns over political interference at the Fed, investors remain confident the US central bank will still move to cut interest rates later this year, limiting the Dollar’s upside.

The Pound (GBP) initially came under pressure as a mild risk-off mood weighed on risk-sensitive currencies.

Sterling was able to recover those losses early in the session after the UK’s final manufacturing PMI for January was revised higher.

The index was confirmed at 51.8, its strongest reading in 17 months and slightly above the preliminary estimate of 51.6, signalling improving conditions in the factory sector.

Despite the positive revision, GBP gains proved limited. While analysts welcomed signs of stabilisation in manufacturing, many warned that ongoing trade uncertainty and rising cost pressures could continue to weigh on UK industry well into 2026.

GBP/USD Forecast: US Labour Data in Focus

Looking ahead, attention turns to Tuesday’s release of the US Job Openings and Labour Turnover Survey (JOLTS).

The data is expected to show a modest decline in job vacancies in December, with openings forecast to drift back towards the near four-year low seen in September 2024.

Confirmation of a cooling labour market could place renewed pressure on the US Dollar by reinforcing expectations for Federal Reserve interest rate cuts later this year.

With the UK data calendar remaining light, movements in GBP/USD are likely to be driven by shifts in global risk appetite. A risk-off tone could favour the safe-haven Dollar, while an improvement in sentiment following the JOLTS release may allow Sterling to regain some ground.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts