Modified: Monday, 9 February 2026 20:31 BST

– Written by


Tim Boyer

STORY LINK GBP/USD Forecast: Pound Sterling Supported Amid Yen Strength, Jobs Doubts

The Pound to US Dollar exchange rate (GBP/USD) found modest support at the start of the week, with the pair steadying as doubts over the outlook for US employment weighed on the Dollar.

At the time of writing, GBP/USD was trading close to $1.3652, up around 0.3% from Monday’s opening levels as investors grew increasingly cautious ahead of key US labour market data.

The US Dollar struggled to find momentum as confidence in the resilience of the American jobs market continued to ebb.

A run of softer-than-expected employment indicators released last week has left markets wary ahead of January’s delayed non-farm payrolls report. Any disappointment could weigh heavily on the Greenback and further complicate expectations for Federal Reserve policy in the months ahead.

Adding to the Dollar’s woes was renewed strength in the Japanese Yen.

The Yen rallied after Japan’s ruling Liberal Democratic Party secured a decisive election victory, fuelling expectations of fresh fiscal stimulus and pushing Japanese government bond yields higher. The move encouraged capital flows away from the US Dollar, further pressuring USD exchange rates.

Sterling, meanwhile, struggled to build on its early gains as political uncertainty in the UK resurfaced.

Confidence in the Pound took a knock following the resignation of Prime Minister Keir Starmer’s chief of staff, Morgan McSweeney, over the weekend. The departure has intensified scrutiny of Starmer’s leadership and unsettled investors.

The episode has also revived attention on Starmer’s decision to appoint Peter Mandelson as the UK’s ambassador to Washington, with renewed focus on Mandelson’s past links to Jeffrey Epstein adding to the unease.

For GBP investors, McSweeney’s exit has heightened concerns over instability within the government, particularly at a time when divisions inside the Labour Party appear to be becoming more visible.

GBP/USD Forecast: US Jobs Data to Drive Near-Term Direction

Looking ahead, the next major test for the Pound to US Dollar exchange rate will be Wednesday’s release of the US non-farm payrolls report.

Markets are forecasting job creation of around 70,000 in January, an improvement on December’s 50,000 gain. A result in line with expectations could offer the US Dollar some support.

However, another downside surprise would likely trigger renewed USD selling, especially given the recent run of underwhelming labour data.

With no significant UK economic releases scheduled, Sterling is likely to remain sensitive to domestic political developments. Any further pressure on Prime Minister Starmer’s leadership could leave the Pound vulnerable through the remainder of the week.

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TAGS: Pound Dollar Forecasts