GBP/USD Outlook: Soft US Producer Prices Keep Dollar Under Pressure

Modified: Thursday, 13 August 2026 20:46 BST - Written by John Cameron

STORY LINK GBP/USD Outlook: Soft US Producer Prices Keep Dollar Under Pressure

The Pound US Dollar (GBP/USD) exchange rate struggled to establish a clear direction on Thursday, with UK GDP, US PPI and broader risk sentiment failing to drive a decisive move.

At the time of writing, GBP/USD was trading at $1.3508, marginally higher than at the start of the session.

The Pound (GBP) lacked momentum on Thursday, as the latest UK GDP figures failed to provide Sterling with much support.

The UK economy grew by 0.4% during the second quarter, marking a slowdown from the 0.6% expansion seen in Q1. Despite the weaker pace, growth remained reasonably solid.

Sterling found little reason to rally, however, with the figures coming in exactly as expected. Moreover, some of the growth was attributed to temporary and seasonal influences, including the World Cup in June and unusually warm summer weather, both of which gave economic activity a boost.

Looking ahead, some economists warned that UK growth could lose further momentum in the second half of the year. Persistent inflation and the ongoing conflict in the Middle East could add to the pressure facing the economy, limiting the Pound's ability to make further gains.

The US Dollar (USD) initially found support on Thursday as concerns surrounding the US-Iran war boosted demand for the safe-haven currency.

However, the 'Greenback' later came under pressure following the latest US producer price index figures. Factory gate inflation was unchanged in July, falling short of expectations for a 0.2% increase.

The figures offered further signs that US inflationary pressures may be less persistent than previously feared, reducing expectations that the Federal Reserve will raise interest rates.

Near-Term GBP/USD Forecast: US Data to Dent the Dollar?

Looking ahead, Friday will bring two important US data releases that could put pressure on the 'Greenback'.

First up are the latest US retail sales figures. Economists expect growth in sales to have slowed from 0.2% in June to just 0.1% in July. A weaker reading could fuel concerns over the strength of US consumer spending and the wider American economy.

The University of Michigan will also release its preliminary consumer sentiment index for August. A deterioration in consumer morale is expected, which could add to the pressure on the US Dollar.

However, risk appetite may also shape GBP/USD movements, potentially offering the 'Greenback' some support. Continued concern over tensions in the Middle East could encourage demand for the safe-haven Dollar if markets remain unsettled.

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TAGS: Pound Dollar Forecasts