– Written by
Frank Davies
STORY LINK Pound Sterling to Dollar Forecast: GBP Slips as Strong US ISM Data Lifts USD
The Pound to US Dollar (GBP/USD) exchange rate climbed to a two-week high at the start of the week before surrendering those gains in the wake of the latest manufacturing PMI releases.
At the time of writing, GBP/USD was trading at $1.3425, down almost 0.4% on the day.
The safe-haven US Dollar (USD) came under pressure at the start of the week as optimism over the prospect of a new ceasefire agreement between the US and Iran lifted market sentiment.
That weakness proved short-lived, however. The ‘Greenback’ recovered after Tehran rejected Washington’s claims that direct talks between the two sides were set to take place, prompting demand for safer assets. USD also found additional support as traders stepped in to buy the currency following last week’s sharp decline.
The latest ISM manufacturing PMI further boosted the US Dollar, with the July survey reporting a stronger-than-expected improvement. The index climbed to 55.6, marking its highest level since May 2022.
The Pound (GBP) was subdued at the start of the week as the latest UK economic data failed to provide investors with a fresh catalyst.
July’s final manufacturing PMI was revised lower from the preliminary reading of 52.8 to 51.9, slipping back from June’s figure of 52.5.
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The downward revision pointed to a dip in business confidence, with the renewed escalation in the US-Iran conflict appearing to unsettle UK manufacturers.
Despite this, the report also highlighted some positive developments. UK manufacturing has now expanded for nine consecutive months following a prolonged contraction throughout much of 2025, while output, new orders and export demand all remained on an upward trajectory. This helped Sterling limit its losses.
Near-Term GBP/USD Forecast: US Economic Releases to Drive Movement
Looking ahead, attention will turn to the latest US economic data, with June’s Job Openings and Labor Turnover Survey (JOLTS) and factory orders figures due for release on Tuesday.
Economists expect job openings to edge lower, which may leave the US Dollar (USD) on softer footing. At the same time, factory orders are forecast to rebound after falling 1.3% in May, although the anticipated 0.2% increase suggests manufacturing demand remains subdued.
Together, these releases could place some pressure on the ‘Greenback’.
Elsewhere, shifts in market sentiment are also likely to influence the Pound to US Dollar exchange rate. Should easing tensions in the Middle East encourage investors to favour riskier assets, GBP/USD may regain ground.
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TAGS: Pound Dollar Forecasts
