GBP/USD Forecast: Pound Sterling Retreats After Upbeat US Jobs Report

Modified: Wednesday, 11 February 2026 20:01 BST - Written by David Woodsmith

STORY LINK GBP/USD Forecast: Pound Sterling Retreats After Upbeat US Jobs Report

The Pound to Dollar exchange rate (GBP/USD) drifted lower on Wednesday after a stronger-than-expected US jobs report triggered a rebound in the US Dollar.

At the time of writing, GBP/USD was hovering near 1.3657, easing back from an earlier session high of 1.3707 as the Greenback regained momentum.

The US Dollar initially opened on a softer footing but reversed course sharply following the release of January’s non-farm payrolls data.

In the build-up to the report, market expectations had been cautious after comments from White House economic adviser Kevin Hassett hinted at slowing job growth. However, the US Bureau of Labor Statistics reported that 130,000 jobs were added in January, comfortably beating forecasts of 70,000 and improving on December’s downwardly revised 48,000.

The stronger print prompted investors to pare back bets on imminent Federal Reserve rate cuts, with expectations shifting towards a possible summer easing rather than a spring move. The repricing helped fuel a swift recovery in the US Dollar.

Sterling had edged higher earlier in the session, although the move appeared largely technical rather than fundamentally driven.

With no significant UK data releases to guide trade, the Pound’s early gains reflected short-covering after recent weakness rather than renewed confidence in the domestic outlook.

Political uncertainty continued to hover in the background, with ongoing debate surrounding Prime Minister Keir Starmer’s leadership limiting appetite for sustained Sterling buying.

Looking ahead, attention now turns to the UK’s fourth-quarter GDP figures due on Thursday.

Preliminary estimates suggest the economy expanded by 0.2% quarter-on-quarter in Q4 2025, up slightly from 0.1% previously. While still modest, confirmation of firmer growth could reduce immediate pressure on the Bank of England to cut rates, potentially offering some support to the Pound.

For the US Dollar, focus will shift to Friday’s consumer price index release. Forecasts suggest inflation cooled in January, and any downside surprise could revive speculation over earlier Fed rate cuts, tempering the Dollar’s recent recovery.

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TAGS: Pound Dollar Forecasts