US Dollar Forecast: Week of 7 September 2026 — ECB Decision, US CPI and GBP/USD Outlook

GBP/USD is forecast to trade between 1.3350 and 1.3650 in the week of 7 to 11 September 2026, and GBP/EUR between 1.1500 and 1.1750. The European Central Bank is widely expected to raise rates on Thursday, and US inflation lands on Friday — the last major price reading before the Federal Reserve decides on 16 September.

What happened to the dollar last week?

The US labour market came back from the dead, and the dollar went with it. Non-farm payrolls rose by 162,000 in August against consensus forecasts in the mid-50,000s. The two previous months were also revised up by a combined 55,000: June from +20,000 to +31,000, and July from a reported fall of 23,000 to a gain of 21,000. The unemployment rate was unchanged at 4.1%.

A month ago the story was a stalling jobs market that would stop the Federal Reserve tightening. That story is gone. Market-implied odds of a quarter-point increase on 16 September firmed through Friday, with reported readings ranging from about 57% to about 65%, up from roughly half before the release.

On the European Central Bank’s daily reference rates, GBP/USD eased from 1.3583 on 28 August to 1.3530 on 4 September, a fall of about 0.4% across the week. GBP/EUR was close to flat at 1.1642, and EUR/USD ended the week fixed at 1.1622.

Will the dollar go up this week?

The dollar may hold its gains into Friday, but the week’s decisive number is US inflation rather than anything the Fed says — because the Fed says nothing. Its communications blackout began on Saturday 5 September, under the rule that it starts the second Saturday before a meeting. Friday’s Consumer Price Index at 13:30 UK time is therefore the last significant input before the 16 September decision.

GBP/USD may trade broadly between 1.3350 and 1.3650. A firm CPI would confirm the hike and could press the pair towards the lower end; a soft one would reopen the argument and give sterling room towards the upper end. Monday is quieter than usual — US and Canadian markets are closed for Labor Day, so expect thin conditions and exaggerated moves on little news.

Our GBP/USD forecast page carries the medium-term range, and the dollar index outlook covers the trade-weighted picture.

Both central banks are tightening into an energy shock, not an inflation problem

This is the week’s most useful detail, and it is being widely skipped. Headline inflation is rising on both sides of the Atlantic. Underlying inflation is not.

Euro area annual inflation is estimated at 3.3% in August 2026, up from 2.9% in July — a jump that reads alarmingly until the components are separated. Energy rose 14.3% year on year, up from 10.3%. Strip energy out and the rate is 2.2%, exactly where it was in July. Services inflation actually fell, to 3.0% from 3.3%.

The American picture rhymes. US headline CPI was 3.4% in the year to July 2026, but core CPI, excluding food and energy, eased to 2.5% from 2.6%. Average hourly earnings growth slowed to 3.1% a year in August, down from 3.2% in July. A tightening labour market is not yet producing accelerating wages.

So both committees are being pushed towards higher rates by an energy price shock while their core measures behave. Looking through an energy shock is the textbook response; doing the opposite is a choice about credibility rather than about demand. That tension is what makes both Thursday and Friday genuinely two-sided, and it is why a hawkish surprise and a dovish one are about equally available this week.

Will the ECB raise rates on Thursday?

Economists overwhelmingly expect it to. A Reuters poll of 65 economists found consensus for a 25 basis-point rise in the deposit rate to 2.50% on 10 September, with 90% expecting that level to hold through year-end. The deposit rate has been 2.25% since before the July meeting, when the Governing Council said it was “not pre-committing to a particular rate path”.

Thursday falls in the ECB’s quarterly projection round, so the decision at 13:15 UK time arrives with fresh staff forecasts and a press conference at 13:45. For the euro, the projections may matter more than the rate itself: a hike already expected by almost everyone is priced, while the inflation profile the staff publish will shape how much more tightening the market believes is coming.

GBP/EUR may hold a 1.1500 to 1.1750 range. A hike delivered with cautious guidance could leave the pair broadly where it is; a hike with an upgraded inflation profile could pull it towards the lower end. Our pound to euro forecast and euro outlook cover the longer view.

Sterling is the only one of the three not scheduled to move

Here is the arithmetic worth holding on to. Bank Rate is 3.75%. The ECB deposit rate is 2.25%, a gap of 150 basis points in sterling’s favour. The Fed’s target range is 3.50–3.75%, a midpoint of 3.625% — just 12.5 basis points below Bank Rate.

If the ECB raises to 2.50% on Thursday, the euro gap narrows to 125 basis points. If the Fed then raises to 3.75–4.00% on 16 September, its midpoint of 3.875% moves 12.5 basis points above Bank Rate. The Bank of England does not decide until 17 September — the day after the Fed, and a week after the ECB.

In other words, sterling’s rate cushion could be compressed on both sides within eight days while the Bank itself does nothing. That is not a prediction that it will happen: the Bank held 6–3 on 30 July with three members preferring an immediate rise to 4.00%, so the UK has its own hawkish minority. But it is the structural reason this fortnight matters more than a typical run of data.

EUR/USD forecast: two decisions, one pair

EUR/USD may trade between 1.1450 and 1.1750 this week, having been fixed at 1.1622 by the ECB on 4 September. It is the pair with most at stake: one of its two central banks decides on Thursday, and the last major input to the other’s decision lands on Friday. That argues for wider intraday swings than the range alone suggests.

The sequence matters: the euro gets its answer on Thursday afternoon, the dollar gets its last clue on Friday lunchtime. A hawkish ECB followed by a soft US CPI is the combination that would push the pair hardest towards the top of the range; the reverse would test the bottom. The EUR/USD forecast page sets out the six-month framework, and the live currency converter shows the mid-market rate now.

What UK data lands this week?

Friday morning is the UK’s only substantial contribution: July monthly GDP, industrial and manufacturing production and the trade balance, all at 07:00. Monthly GDP grew 0.3% in June 2026 after no growth in May, with the three-month-on-three-month rate at 0.4%.

A weak July print would strengthen the argument for the Bank holding on 17 September, and could weigh on sterling into the weekend. A strong one does the opposite. UK consumer inflation expectations follow at 09:30 — a second-tier release most weeks, but one the MPC’s hawks will read closely ahead of their meeting. The currency forecast hub carries the pair-by-pair ranges and the full central bank calendar.

The economic calendar this week at a glance

All times are UK (BST).

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

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

The next ten days settle far more than this week does. The ECB decides on Thursday, the Fed on 16 September with a fresh Summary of Economic Projections, and the Bank of England on 17 September. By the end of that week the market will know whether sterling’s yield advantage has been squeezed from one side, both, or neither.

Beyond that, the question is whether the energy shock feeding headline inflation persists into 2027 or fades. If it fades and core measures stay where they are, the tightening now being priced could prove short-lived, and the pound’s relative position would depend once more on UK growth. If energy prices stay elevated, all three central banks may be holding higher rates for longer than their own projections currently assume. Our USD forecast for 2026 sets out the dollar scenarios in more detail.

None of this is settled. A single surprising release or a shift 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.

What does this week mean for your currency transfer?

The width of the range is what costs money, not the direction. On a £400,000 transfer, converting GBP/USD at an illustrative 1.3650 rather than 1.3350 is the difference between $546,000 and $534,000 — $12,000 on the same pounds, decided by two data releases in the space of 24 hours.

On the euro side, the same £400,000 at an illustrative 1.1750 rather than 1.1500 gives €470,000 against €460,000, a gap of €10,000. For anyone completing a property purchase in Spain or funding a dollar settlement in the United States, that is the cost of letting the timing fall wherever the funds happen to clear.

How can you manage the risk around Thursday and Friday?

A week with two scheduled events and a central bank decision the following Wednesday is exactly the case the standard tools exist for. A forward contract fixes today’s rate for settlement up to twelve months ahead, removing both this week’s events and the 16–17 September decisions from the equation. 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 concentrating it on one release, which suits a deadline weeks rather than days away. Which approach fits depends on your timetable and how much movement you can absorb, not on a view about the rate. Our guide to whether now is a good time to buy US dollars works through the trade-off in detail.

Frequently asked questions

Will the dollar rate increase this week?

The dollar starts the week firm after August payrolls came in at 162,000 against consensus forecasts in the mid-50,000s, which lifted market-implied odds of a 16 September Federal Reserve rate rise to somewhere between about 57% and 65%. Friday’s US Consumer Price Index at 13:30 UK time is the release most likely to confirm or unwind that. GBP/USD may trade between 1.3350 and 1.3650 across the week.

Is the ECB expected to raise interest rates on 10 September 2026?

Yes — a Reuters poll of 65 economists found consensus for a 25 basis-point increase in the deposit facility rate to 2.50%, with 90% expecting that level to hold to the end of 2026. The decision is announced at 13:15 UK time on Thursday 10 September, followed by a press conference at 13:45 and new ECB staff projections.

Why is euro area inflation at 3.3% if the ECB has been holding rates?

Almost all of the increase is energy. Euro area energy prices rose 14.3% in the year to August 2026, up from 10.3% in July. Inflation excluding energy was 2.2%, unchanged from July, and services inflation fell to 3.0% from 3.3%. Headline inflation is rising while underlying inflation is flat.

Is there a Bank of England meeting this week?

No. The Monetary Policy Committee held Bank Rate at 3.75% on 30 July 2026 in a 6–3 vote, with three members preferring an immediate rise to 4.00%. The next decision is 17 September 2026, the day after the Federal Reserve’s.

What is the most important event for the pound this week?

Friday. UK July GDP at 07:00 sets the domestic tone, and US CPI at 13:30 sets the dollar tone that drives GBP/USD. Thursday’s ECB decision is the bigger event in absolute terms but reaches sterling indirectly, through GBP/EUR.

Should I buy dollars before or after Friday’s US inflation figure?

That depends on your deadline rather than on a forecast. If the payment is due within days, the practical question is whether you could absorb a move of a cent or more against you on Friday afternoon. If it is months away, you have room to plan. A forward contract removes the event risk entirely, a market order targets a level, and splitting the amount spreads the timing across sessions.

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 Thursday

If you have a euro or dollar payment due in September — an overseas completion, a business settlement or a large one-off transfer — this is a fortnight worth planning rather than watching. Speak to a Cambridge Currencies specialist about timing your transfer around the ECB decision and the Fed, 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
• Is now a good time to exchange money? — weighing a live deadline against an open-ended one

Sources: US Bureau of Labor Statistics — Employment Situation, August 2026; US Bureau of Labor Statistics — Consumer Price Index, July 2026; Eurostat — euro area annual inflation flash estimate, August 2026; European Central Bank — monetary policy decisions, 23 July 2026; European Central Bank — euro foreign exchange reference rates; European Central Bank — macroeconomic projections; Bank of England — July 2026 Monetary Policy Summary and minutes; Bank of England — upcoming MPC dates; Federal Reserve — FOMC statement, 29 July 2026; Federal Reserve — FOMC calendar; Federal Reserve — FOMC blackout period calendar; Office for National Statistics — GDP monthly estimate, June 2026; Reuters poll of economists on the ECB, reported 3 September 2026; market pricing for the September FOMC, reported 4 September 2026.