Pound Sterling to Dollar Forecast: GBP Soars After US NFP MIss

Modified: Thursday, 2 July 2026 13:56 BST - Written by David Woodsmith

STORY LINK Pound Sterling to Dollar Forecast: GBP Soars After US NFP MIss

The Pound to Dollar exchange rate (GBP/USD) surged to two-week highs above 1.3370 after a much weaker-than-expected US jobs report triggered broad-based Dollar selling.

US non-farm payrolls increased by just 57,000 in June, well below forecasts of 114,000, while May's gain was revised sharply lower to 129,000 from 172,000.

The disappointing figures have prompted investors to scale back expectations of further Federal Reserve rate hikes, providing a strong boost to Sterling.

GBP/USD Forecasts: 2-week Highs

The Pound to Dollar (GBP/USD) exchange rate held above 1.3200 on Wednesday and advanced to 2-week highs around 1.3290 after the New York open.

The Pound maintains a strong tone with further evidence of short covering after the currency failed to lose ground while the dollar was unable to hold its best levels.

According to UoB, GBP/USD faces tough resistance around 1.3275 and a sustained break above would improve the outlook.

Monetary policy on both sides of the Atlantic will be a key currency influence.

The US ADP data recorded an increase in private payrolls of 98,000 for June, below consensus forecasts of 120,000 and after a May increase of 122,000. The ISM manufacturing index edged lower to 53.3 from 54.0 previously and slightly below expectations of 53.8.

The monthly employment report will be released on Thursday with expectations of an increase in non-farm payrolls of around 115,000.

Fed Chair Warsh maintained a tight-lipped approach to monetary policy in a speech on Wednesday. According to Warsh; “We get into that room and shut the door, we're going to have a good debate, but I don't have much more for you than that." He added; "I am not going to give forward guidance.”

Traders are pricing close to a 70% chance that the Fed will hike rates by September compared with around 20% last month.

Danske Bank commented; “Our reading of the market is that it buys Warsh’s apparent frustration with inflation overshooting the Fed’s inflation target for five years and that he will succeed in his insistence that the Fed will deliver price stability.”

Danske also notes that yields remain elevated and added; “This suggests that Warsh’s quest to rein in excess inflation may come at a cost. The probability on Kalshi that the US falls into recession next year has also risen slightly.”

MUFG is sceptical that the dollar will make further headway; “near-term sentiment will be determined by the NFP print tomorrow. But consumers generally remain grim and that points to the non-AI economy remaining subdued. With inflation set to fall, we see current Fed rate hike pricing reversing and hence see limited scope for much extension to this period of US dollar appreciation.”

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TAGS: Pound Dollar Forecasts