Modified: Friday, 7 August 2026 10:31 BST

– Written by


Frank Davies

STORY LINK British Pound to Dollar Forecast: GBP Steady as Middle East Optimism Cools

The Pound US Dollar (GBP/USD) exchange rate remained trapped in a narrow range on Thursday as investors balanced geopolitical uncertainty against expectations for key US labour market data.

At the time of writing, GBP/USD was trading at around $1.3459, largely unchanged from Thursday’s opening levels.

The US Dollar (USD) held firm on Thursday as investors grew less confident that a ceasefire agreement between the US and Iran would be reached in the immediate future.

Earlier in the week, optimism over progress in negotiations had boosted market sentiment and reduced demand for the safe-haven ‘Greenback’.

However, reports indicating that talks remain deadlocked over shipping access, monitoring arrangements and other key issues prompted traders to scale back expectations of a swift breakthrough.

Iran also reiterated that any reopening of the Strait of Hormuz depends on resolving several unresolved conditions, helping to lift oil prices and restore some defensive demand for the US Dollar.

The Pound (GBP) traded without a clear direction on Thursday as the lack of UK economic releases left investors with little reason to adjust their positions.

Stable trading in the UK gilt market also failed to provide Sterling with meaningful support, while subdued conditions across global financial markets kept volatility low.

With few domestic or international catalysts emerging, the UK currency remained confined to a tight trading range against most of its peers.

Near-Term GBP/USD Forecast: US Payrolls to Drive End-of-Week Trade?

Attention now turns to Friday’s US non-farm payrolls report, which is expected to be the key driver of movement in the Pound to US Dollar (GBP/USD) exchange rate.

Economists expect employment growth to have recovered in July following June’s particularly weak reading.

Should payroll growth once again disappoint and remain below the 100,000 mark, investors may further reduce expectations of a Federal Reserve interest rate hike in September, potentially dragging the US Dollar lower.

Meanwhile, with the UK calendar remaining devoid of notable economic releases, Sterling is likely to continue taking its cues from broader market sentiment and moves in its major counterparts.

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TAGS: Pound Dollar Forecasts