Modified: Thursday, 2 April 2026 10:31 BST

– Written by


Tim Boyer

STORY LINK Pound to Dollar Forecast: GBP Rebounds as USD Slips on Iran Hopes

The Pound to Dollar exchange rate (GBP/USD) rebounded above 1.3300 after hitting four-month lows near 1.3150, as easing geopolitical tensions weakened the US dollar and lifted risk appetite.

However, with uncertainty still high and the Bank of England pushing back against rate-hike expectations, Sterling’s recovery remains fragile.

GBP/USD Forecasts: Bounces from 4-Month Lows

After a torrid trading day on Tuesday, the Pound secured some respite on Wednesday. The prime influence, however, was a weaker dollar amid a rebound in risk appetite with the Pound overall still struggling.

After hitting 4-month lows near 1.3150, the Pound to Dollar (GBP/USD) exchange rate rebounded to just above 1.3300.

Equity gains offered support, but traders are still wary over the risk of sudden reversal in optimism while hints from Bank of England (BoE) Governor Bailey that he would not back a rate hike hampered the Pound.

According to UoB; “Downward momentum is starting to fade, and if GBP breaks above 1.3285 it would indicate that GBP has moved into a range-trading phase.

ING commented; “Markets are making another attempt at playing the de-escalation trade. The trigger was reports that Iranian officials are leaning towards dialogue and Trump explicitly saying the US will end the war within two to three weeks.”

Trump also claimed that Iran had asked for a ceasefire and he will address the nation after the New York close.

MUFG expressed some caution; “There is certainly a logic to this rebound in risk on renewed optimism but there are numerous questions that remain unanswered over how this conflict will evolve over the coming weeks.”

It noted the importance of the Strait of Hormuz; “As the WSJ reported yesterday, it looks like the US is going to leave and hope that the exit of the US will encourage Iran to reopen the key chokepoint for global energy. That could prove correct but it is no certainty that Iran will play it like that.”

As far as US data is concerned, ADP reported a 62,000 increase in private payrolls for March compared with consensus forecasts of around 40,000 and followed a 66,000 gain for February.

ADP chief economist Dr. Nela Richardson commented; “Overall hiring is steady, but job growth continues to favor certain industries, including health care.”

BoE Governor Bailey stated that the MPC may debate the case for a precautionary rate rise, but needs to judge that in the context of the remit and how to return inflation to target.

He reiterated; “I still think markets are getting ahead of themselves by pricing in rate hikes.

The ​BoE also warned over the financial risks to the UK and global economy; “the prospect of weaker growth and higher inflation and borrowing costs raised the chance of ‌risks crystallising simultaneously in government debt markets, private credit and the valuations of U.S. tech giants.”

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TAGS: Pound Dollar Forecasts