June 6, 2025 – Written by David Woodsmith

STORY LINK Pound to Dollar Forecast: GBP Sterling Slides on US Jobs USD Relief

Dollar Secures Limited Corrective Relief after Jobs Data, GBP/USD Held Below 39-Month Highs

The dollar managed to secure tentative gains on Friday following the latest US jobs release. The data certainly had important weaknesses, but markets were braced for an even weaker report and the figures triggered an element of short covering.

Markets were also monitoring the Trump-Musk row given the potential impact on the Budget Bill in the Senate.

After failing to make a fresh attack on 1.3600 earlier in the day, the Pound to Dollar (GBP/USD) exchange rate dipped to lows at 1.3520.

According to Scotiabank the outlook is still bullish; “the September/April highs around 1.34 are likely to provide meaningful support from here. An extension of gains above 1.36 should find limited resistance ahead of the early 2022 high around 1.3750.”

ING noted market positioning; “With a market seemingly positioned for a soft number today, we think it will take a figure substantially under +100k and a rise in the unemployment rate (currently a low 4.2%) to trigger another leg lower in the dollar.”

The US employment report registered an increase in non-farm payrolls of 139,000 for May, above consensus forecasts of around 125,000, although the April increase was revised down to 147,000 from the original estimate of 177,000.

There were monthly job losses in manufacturing, retail and professional services while there was also a marginal decline in government jobs.

The unemployment rate held at 4.2% which was in line with expectations.

There was, however, a substantial decline in the labour force of 625,000 and the number of people reported as being employed plunged close to 700,000 on the month.

According to Annex Wealth Management Chief Economist Brian Jacobsen; “On its face, this shows an economy that’s holding up under the weight of a trade war, but the details show plenty of cracks forming.”

Ray Attrill, head of FX research at National Australia Bank commented; “Within all the noise the softness that we’ve seen in the data this week has probably been more responsible for rejuvenating the bearish U.S. dollar narrative than anything else that’s gone on.”

He added; “We’ve always taken the view that once it becomes clear that the U.S. economy is no longer exceptional, and that the policy actions that we’ve seen to date, together with the relative tightness of Fed policy, will start to show through particularly in a weakening labour market.”

Thursday’s data recorded a huge decline the monthly goods trade deficit to $61.6bn for April from a record $138.3bn the previous month as imports plunged.

Wells Fargo commented; “The temporary surge in imports as businesses pulled-forward demand to get ahead of tariffs has run its course. The U.S. international trade deficit narrowed sharply in April as a result and suggests a big boost to Q2 growth from net exports.”

Scotiabank commented; “With broader market sentiment still quite fragile, a new front of worry has opened up between President Trump and Elon Musk. Yesterday’s social media fisticuffs are one thing but Musk could muster support against the president’s tax bill, adding to broader market uncertainty.”

It added; “The overall downtrend remains intact and the USD has a lot of work to do in order to display any real strength. It does, however, see scope for a short-term bottom for the dollar index.

There were no major UK developments on Friday with traders looking ahead to next week. Scotiabank commented; “The near-term domestic release calendar offers some risk as we look to next week’s employment, industrial production, and trade figures.”

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TAGS: Pound Dollar Forecasts