Pound to Dollar Rate Forecast: GBP Pressured by UK Bond Rout, US Jobs Data

Modified: Tuesday, 10 February 2026 12:46 BST - Written by Frank Davies

STORY LINK Pound to Dollar Rate Forecast: GBP Pressured by UK Bond Rout, US Jobs Data

The Pound to Dollar exchange rate (GBP/USD) is navigating a fragile balance as rising UK bond yields, mounting political pressure on Prime Minister Starmer and crucial US labour market data converge to drive near-term direction.

With gilt yields hitting fresh 2026 highs and investors bracing for delayed US jobs figures, Sterling is holding above 1.35 but remains vulnerable to sharp volatility on both sides of the Atlantic.

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GBP/USD Forecasts: Hold Above 1.35

The Pound to Dollar (GBP/USD) exchange rate dipped below 1.3600 in early Europe on Monday before trading just above this level as a weaker dollar helped spare the Pound from further punishment with a rebound to around 1.3650. Crucial support is in the 1.3500 area.

According to Scotiabank; “the GBP looks to have found nearterm support around 1.35, at levels roughly corresponding to the prior local high from early January. The RSI is neutral, and additional support is expected around the 50 day MA at 1.3477 as well as the 200 day MA at 1.3430. We look to a near-term range bound between 1.3550 and 1.3650.”

CIBC has a year-end GBP/USD forecast of 1.39.

UK and US developments are both likely to have an important impact during the week with a focus on UK politics and US jobs data.

Political tensions have continued to rock the Pound with Prime Minister Starmer remaining under severe pressure over the Mandelson scandal.

Over the weekend, his chief of staff McSweeney resigned in an attempt to deflect pressure on Starmer, but his position remains perilous.

Markets remain concerned that if Starmer is forced to resign, Chancellor Reeves would also be likely to lose her job with markets fretting over the outlook for fiscal policy.

UK bonds lost ground on Monday with the 10-year yield increasing to a 2026 high of 4.58%. There will be further concerns over debt interest payments with the risk that bonds and the Pound will slide in tandem.

ING expects dollar vulnerability; “Barring a significant turn for the worse in risk appetite, it looks like we could see a down week for the dollar.”

It considers that solid risk appetite was curbing dollar demand.

The bank added; “US labour market data surprised on the downside last week, and markets are now bracing for the Federal Reserve to potentially re-apprise its view of the jobs market.”

The delayed US employment report is now due on Wednesday. Consensus forecasts are for an increase in non-farm payrolls of around 70,000 from 50,000 last month with the unemployment rate holding at 4.4%.

The latest retail sales data is due on Tuesday with the latest consumer prices data on Friday.

CNBC does see scope for a near-term dollar recovery; “For now, we are cognizant of near-term USD upside driven by very tactical catalysts. For one, the reshuffling of speculative positions in gold, silver, and bitcoin could still need more time to stabilize.”

The bank also sees the risk of a dip in risk appetite which would potentially support the US currency.

As far as UK data is concerned, the latest GDP data is due onThursday with consensus forecasts for a 0.1% increase for December from 0.3% previously.

Markets are also expecting GDP growth of 0.2% for the fourth quarter from 0.1% previously.

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TAGS: Pound Dollar Forecasts