Published: Thursday, 12 February 2026 10:00 BST

– Written by


David Woodsmith

STORY LINK Pound to Dollar Forecast: Strong US Payrolls Cap GBP Below 1.37

The Pound to Dollar exchange rate (GBP/USD) has slipped back below 1.37 after stronger-than-expected US non-farm payrolls reinforced Federal Reserve caution and lifted US yields.

While Sterling remains supported by easing political tensions at home, firmer US labour market data has stalled the recent GBP/USD advance and refocused attention on Fed rate expectations.

GBP/USD Forecast: Below 1.37

According to UoB; “Based on the current momentum, any decline is unlikely to break below the support at 1.3600.”

On a near-term view, Scotiabank commented; We look to a near-term range between 1.3620 and 1.3750.

The bank maintains a positive overall stance on the pair; “We see limited resistance between current levels and the January high in the mid-1.38s. A break would shift our focus to the psychologically important 1.40 level.”

US non-farm payrolls were reported as increasing 130,000 for January compared with consensus forecasts of around 65,000 while the December increase was revised marginally lower to 48,000 from 50,000 previously. A drop in government jobs was offset by a strong 172,000 gain in private payrolls.

The unemployment rate edged lower to 4.3% from 4.4% previously with a strong reported increase in employment.

There were, however, substantial historic revisions with the total 2025 payrolls increase revised down to 181,000 from the 584,000 reported in the monthly data.

Markets were braced for a weak number, especially after comments from White House economic advisor Hassett which tended to amplify the market reaction.

There was a shift in pricing surrounding Federal Reserve policy with markets pricing in a further rate cut by July compared with June previously.

ING is doubtful that the dollar will make much headway; “we should see some of the recent macro negativity leave the dollar. However, conditions for a broad-based sustainable USD recovery don’t appear to be in place, and we think an upward correction in DXY wouldn’t have long legs.”

Scotiabank took a similar view; “While the lower USD means that a weak number is at least partially priced in, we think rebound potential on a better-than-expected report is limited. USD rallies remain a fade.”

MUFG commented on UK politics; “ the renewed political uncertainty is never helpful for the pound, though it looks for now that Starmer’s position as PM is on more secure ground at least until the (May) local elections.” He added; “If he is removed, the knee-jerk reaction is to sell the pound and gilts (British government bonds)”.

Scotiabank pointed out that the UK GDP release is due Thursday;.”In terms of data, we continue to highlight the importance of Thursday’s advance Q4 GDP release given its implications for the BoE. Policymakers are struggling to determine the extent of additional easing required.”

Consensus forecasts are for a 0.1% GDP increase for December with a 0.2% increase for the fourth quarter. Stronger than expected data would provide a further element of relief for the Pound.

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TAGS: Pound Dollar Forecasts