US Dollar Forecast: Week of 28 September 2026 — Core PCE, US Payrolls and the Growth Gap

GBP/USD is forecast to trade between 1.3100 and 1.3400 in the week of 28 September to 2 October 2026, and GBP/EUR between 1.1500 and 1.1700. The US core PCE price index lands on Wednesday and US non-farm payrolls on Friday — the two readings that will shape the Federal Reserve’s 28 October decision. Euro area inflation follows on Friday morning.

What happened to the pound last week?

It fell again. On European Central Bank reference rates, GBP/USD dropped from 1.3344 on 18 September to 1.3252 on 25 September, touching 1.3220 midweek — a second consecutive weekly decline, and about 2% below where it stood a fortnight ago. GBP/EUR also eased, to 1.1622.

The cause was Wednesday’s flash purchasing managers’ surveys, and they were not close. This is the clearest read yet on why sterling is losing ground, and it has nothing to do with a central bank meeting.

Three economies, three directions — and the currencies are following

The September flash PMIs put the three major economies on visibly different paths. A reading above 50 signals expansion; the further above, the faster.

The US composite reached 58.4, a 62-month peak, with services at 58.7 — the strongest in almost five years — and manufacturing at 57.0, the highest since 2022. Employment rose at its fastest pace in more than four years. Input costs climbed at the quickest rate since October 2022.

The UK went the other way. Services slipped to 51.7 against 52.0 expected, from 52.5 in August, with the composite at 51.7. S&P Global’s chief economist described “a worrying combination of disappointingly sluggish economic growth and intensifying inflationary pressures”. The euro area composite came in at 53.1, above the 51.5 expected.

That is the whole currency story in three numbers. The US is accelerating and hiring; the euro area is doing better than forecast; the UK is slowing while its costs rise. Rate differentials get the headlines, but growth differentials are what put them there.

Wednesday is the first real test of the Fed’s own forecast

Here is the detail worth holding on to this week. When the Federal Reserve raised rates on 16 September, its Summary of Economic Projections put median core PCE inflation at 3.4% for 2026 and the median federal funds rate at 4.1% at the end of both 2026 and 2027 — implying one more rise this year, then a long hold.

Core PCE was 3.3% in the year to July 2026, with the monthly rate at 0.2%. Wednesday’s August reading at 13:30 is the first inflation data the market gets to measure against that 3.4% projection since it was published.

The risk is not symmetric. US input costs are rising at their fastest since October 2022 on the PMI surveys, and the economy is running at a five-year high. If core PCE comes in above the Fed’s own annual projection this early, “one more rise” starts to look like a floor rather than a ceiling — and that is a dollar-positive outcome that most commentary is not set up for. A softer print does the reverse. Our USD forecast for 2026 sets out both scenarios.

Will the dollar go up this week?

It has the momentum and the data calendar, but Friday can undo Wednesday. GBP/USD may trade broadly between 1.3100 and 1.3400.

The week has two pivots rather than one. Core PCE on Wednesday at 13:30 is the inflation side; non-farm payrolls on Friday at 13:30 is the employment side, and it is the first jobs report since the Fed moved. August payrolls came in at 162,000 with unemployment at 4.1%. A strong repeat, alongside PMI evidence of the fastest hiring in four years, would reinforce the case for another rise on 28 October. A weak one would not undo the PMIs but would slow the dollar down.

Wednesday is also quarter end, which can produce flows that have nothing to do with the data. Our GBP/USD forecast and the dollar index outlook carry the medium-term picture.

What does the UK have to offer this week?

Very little data, but three Bank of England speakers — and this time both camps are represented. Dave Ramsden speaks on Monday at 11:00 and Alan Taylor on Tuesday at 16:30; both voted to hold Bank Rate at 3.75% on 17 September. Catherine L Mann speaks on Thursday at 13:00, and she is one of the three who voted for 4.00%.

Last week the market heard from three members of the majority. This week it hears from one of the minority. With the committee split 6–3 for a third consecutive meeting and the PMI surveys pointing to slower growth alongside firmer costs, the gap between the two camps is the most informative thing in the UK diary before the 5 November decision, which comes with a Monetary Policy Report.

On the data side, Wednesday brings the final estimate of UK second-quarter GDP at 07:00, along with the current account and business investment. Revisions to a quarter that ended three months ago rarely move a currency far. Our GBP forecast tracks the policy path.

GBP/EUR and EUR/USD forecast

GBP/EUR may hold a 1.1500 to 1.1700 range. The euro has quietly become the better-supported of the two: the ECB raised its deposit rate to 2.50% on 10 September, its composite PMI beat expectations, and its staff projections show core inflation higher in 2027 than in 2026. Sterling has slower growth and a divided committee. Our pound to euro forecast and euro outlook carry the longer view.

EUR/USD may trade between 1.1300 and 1.1550, having been fixed at about 1.1402 on 25 September. Friday is the pair’s day: euro area flash inflation at 10:00, then US payrolls at 13:30. German inflation lands on Wednesday at 13:00 and usually sets the tone for the euro area figure two days later. The EUR/USD forecast page sets out the six-month framework, and the live currency converter shows the mid-market rate now.

The economic calendar this week at a glance

All times are UK (BST).

Release timings and speaker diaries are as scheduled at the time of writing and can change.

What is the three to twelve month outlook for the pound?

The next decisions are the Federal Reserve on 27–28 October, the ECB on 28–29 October and the Bank of England on 5 November. This week’s two US releases are the main inputs the Fed will have before it meets.

For sterling, the question is whether the growth gap closes. A UK composite PMI at 51.7 against a US reading of 58.4 is a wide divergence, and if it persists it argues for continued pressure on GBP/USD regardless of what the MPC does in November. The counterweight is that a slowing UK economy makes a Bank of England rise less likely, which removes one source of volatility even as it removes support.

None of this is settled. A single surprising release, a shift in energy prices or a change in the geopolitical backdrop can move a major pair by more than a cent in a session, and a forecast is a framework for planning rather than a statement of where the rate will be on any given day. The currency forecast hub carries the pair-by-pair ranges.

What does this mean for your currency transfer?

Two weeks of steady decline have already cost anyone who waited. GBP/USD is roughly 2% lower than it was a fortnight ago; on a £400,000 transfer that is roughly $10,000 less for the same pounds, accumulated without a single dramatic headline.

Across this week’s forecast range, converting GBP/USD at an illustrative 1.3400 rather than 1.3100 turns £400,000 into $536,000 rather than $524,000 — $12,000 of difference. On the euro side, 1.1700 rather than 1.1500 gives €468,000 against €460,000, a gap of €8,000. For anyone completing a property purchase in Spain or funding a dollar settlement in the United States, that is the cost of leaving the timing to chance.

How can you manage the risk around Wednesday and Friday?

A forward contract fixes today’s rate for settlement up to twelve months ahead, which removes both releases and the 28 October Fed decision from the equation if your requirement is already known. A market order targets a level you would be content to trade at and executes if the market reaches it, including outside UK hours.

Splitting a large requirement into tranches spreads the exposure across several sessions rather than resting it on one afternoon. That approach suits a trend like the present one, where the move has come in steady increments rather than single jumps. Which option fits depends on your deadline and how much movement you can absorb, not on a view about the rate.

Frequently asked questions

Will the dollar rate increase this week?

The dollar starts the week strong after US flash PMIs hit a 62-month high, and two releases could extend that: core PCE inflation on Wednesday at 13:30 and non-farm payrolls on Friday at 13:30. Both feed directly into the Federal Reserve’s 28 October decision. GBP/USD may trade between 1.3100 and 1.3400 across the week.

Why has the pound been falling?

Two reasons, compounding. The Federal Reserve raised rates on 16 September while the Bank of England held, putting US policy rates above Bank Rate. Then September’s flash PMI surveys showed the US composite at 58.4 against the UK’s 51.7, a wide growth gap. On ECB reference rates GBP/USD has fallen from 1.3508 on 11 September to 1.3252 on 25 September.

What is core PCE and why does it matter?

Core PCE is the personal consumption expenditures price index excluding food and energy, and it is the inflation measure the Federal Reserve targets — not CPI. It was 3.3% in the year to July 2026. The Fed’s own September projections put it at 3.4% for 2026, so Wednesday’s August reading is the first direct test of that forecast.

Is there a Bank of England meeting this week?

No. The Monetary Policy Committee held Bank Rate at 3.75% on 17 September in a 6–3 vote, and the next decision is 5 November 2026 alongside a Monetary Policy Report. Three MPC members speak this week — Dave Ramsden, Alan Taylor and Catherine L Mann.

Where is GBP/EUR heading?

GBP/EUR may hold a 1.1500 to 1.1700 range this week, having eased to 1.1622 on ECB reference rates. The euro area composite PMI beat expectations at 53.1 while the UK slowed to 51.7, and the ECB raised its deposit rate to 2.50% in September. Friday’s euro area flash inflation figure is the main euro-side event.

Should I wait for a better rate?

That depends on your deadline rather than on a forecast. Sterling has fallen against the dollar for two consecutive weeks without a dramatic trigger, which is the pattern that costs people most because there is no obvious moment to act. If your payment is weeks away you have room to plan; if it is days away, the question is how much further movement you could absorb.

What is the minimum transfer Cambridge Currencies handles?

Cambridge Currencies works with transfers from £5,000 upwards, at competitive rates compared with high-street banks. Every transaction is completed by phone with a dedicated specialist, and the firm operates with FCA-authorised partners Currencycloud and ScioPay.

Speak to a specialist before Wednesday

If you have a dollar or euro payment due this autumn — an overseas completion, a business settlement or a large one-off transfer — two weeks of steady sterling weakness is a reason to decide how you want to handle it rather than watch another week go by. Speak to a Cambridge Currencies specialist about your timing, or call 01223 608232. Every transfer is handled personally, over the phone, by a dedicated dealer who knows your deadline.

Related guides

• Weekly currency forecast archive — published every Sunday
• Should I buy US dollars now? — how to weigh a deadline against a rate view

Sources: Federal Reserve — Summary of Economic Projections, September 2026; Federal Reserve — FOMC statement, 16 September 2026; Federal Reserve — FOMC calendar; US Bureau of Economic Analysis — Personal Income and Outlays, July 2026; US Bureau of Labor Statistics — Employment Situation, August 2026; Bank of England — September 2026 Monetary Policy Summary and minutes; Bank of England — upcoming MPC dates; European Central Bank — monetary policy decisions, 10 September 2026; European Central Bank — euro foreign exchange reference rates; UK flash PMI, September 2026, reported 23 September; euro area flash composite PMI, September 2026, reported 23 September; US flash PMI, September 2026, reported 23 September. Release timings are as scheduled at the time of writing.