Modified: Wednesday, 22 July 2026 07:01 BST

– Written by


Minesh Chaudhari

STORY LINK GBP/USD News, Forecast: Sterling Supported by Resilient Labour Market Data

The Pound to US Dollar (GBP/USD) exchange rate remained confined to a narrow range on Tuesday as investors digested the latest UK labour market figures.

At the time of writing, GBP/USD was trading at around $1.3427, little changed from the opening levels of Tuesday’s session.

The Pound (GBP) traded with limited direction on Tuesday as encouraging employment figures offset lingering concerns over the outlook for UK government borrowing costs.

Data released by the Office for National Statistics (ONS) showed the unemployment rate unexpectedly held steady at 4.9% in May, defying forecasts for a rise to 5%.

The report also revealed a much stronger-than-expected increase in employment, with 147,000 new jobs created compared with expectations for a slowdown to around 85,000.

The resilient labour market strengthened expectations that the Bank of England (BoE) could still consider another interest rate increase before the end of the year, helping to underpin Sterling.

However, gains remained capped after UK gilt yields moved higher in response to comments from Prime Minister Andy Burnham, who suggested his government would seek greater fiscal flexibility while remaining within existing budget rules.

The US Dollar (USD) found support on Tuesday as investors continued to monitor the worsening security situation in the Middle East.

Expectations that the renewed conflict would quickly de-escalate have faded, with markets increasingly preparing for a prolonged period of instability that could keep global energy prices elevated.

Sentiment was further rattled after President Donald Trump vowed a forceful response to the deaths of three US service personnel in Jordan, while Iran tightened its control over shipping through the Strait of Hormuz.

The deterioration in geopolitical conditions encouraged demand for traditional safe-haven assets, lending additional support to the US Dollar.

Near-Term GBP/USD Forecast: UK Inflation Figures Awaited

Looking ahead to Wednesday, the UK’s latest consumer price index is expected to be the main driver of movement in the Pound to US Dollar (GBP/USD) exchange rate.

Economists expect headline inflation to ease again in June. If confirmed, the data could reduce expectations for further Bank of England policy tightening and place renewed pressure on Sterling.

Meanwhile, with few notable US economic releases scheduled, the US Dollar is likely to remain heavily influenced by geopolitical developments. Any further escalation in tensions across the Middle East could increase demand for the safe-haven ‘Greenback’.

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts