GBP/USD Forecast: US Jobs Data and Geopolitics in Focus

Modified: Wednesday, 1 April 2026 21:01 BST - Written by Toni Johnson

STORY LINK GBP/USD Forecast: US Jobs Data and Geopolitics in Focus

The Pound to US Dollar (GBP/USD) exchange rate advanced on Wednesday, supported by improving sentiment surrounding the situation in the Middle East.

At the time of writing, GBP/USD was trading near $1.3306, up roughly 0.6% compared to the start of the session.

The US Dollar lost ground as easing geopolitical tensions reduced demand for the safe-haven currency.

Markets were buoyed by signs that relations between the US and Iran may be stabilising, with both sides adopting a less confrontational tone and fuelling expectations that the conflict could de-escalate in the near term.

However, the downside for the US Dollar was partially limited later in the session following the release of upbeat US data, including stronger-than-expected ADP employment figures and a solid rebound in retail sales.

The Pound saw mixed performance, gaining against safer currencies while struggling to keep pace with more risk-sensitive peers as market sentiment improved and energy prices eased.

Domestically, Sterling faced some pressure after the UK’s finalised manufacturing PMI for March was revised lower from 51.4 to 51, pointing to softer momentum in the sector.

This contributed to a shift in expectations for the Bank of England, with investors reassessing the likelihood of multiple interest rate increases in 2026 as both easing geopolitical tensions and signs of domestic weakness come into play.

Short-Term GBP/USD Forecast: Geopolitics and US Jobs Data in Focus

The Pound to US Dollar exchange rate is likely to remain sensitive to developments in the Middle East.

If optimism around a potential resolution continues to build, the US Dollar may remain under pressure as investors favour riskier assets.

Alternatively, any resurgence in tensions could quickly restore demand for the US Dollar.

Attention will also turn to upcoming US labour market data, with a weaker-than-expected payrolls reading likely to weigh on the US Dollar if it strengthens expectations that the Federal Reserve may adopt a more dovish stance.

With limited UK data releases and thinner liquidity conditions expected due to the approaching Easter break, Sterling may take its cues primarily from broader market sentiment.

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TAGS: Pound Dollar Forecasts