Modified: Thursday, 9 April 2026 09:11 BST

– Written by


Ben Hughes

STORY LINK Pound Sterling to Dollar Forecast: GBP’s “Sentiment-driven Gains” see 1% Rally

The Pound to Dollar exchange rate (GBP/USD) surged above 1.3400 after a ceasefire agreement in the US-Iran conflict triggered a sharp drop in oil prices and a rebound in global risk appetite.

While the weaker dollar has boosted Sterling in the short term, analysts warn that uncertainty remains high and gains could face resistance near the 1.35 level.

GBP/USD Forecasts: Jump Above 1.3400

The Pound to Dollar (GBP/USD) exchange rate jumped above the 1.3400 level in Asia on Wednesday following the announcement of a ceasefire in the US-Iran conflict.

Just ahead of President Trump’s deadline, a deal brokered by Pakistan secured a 2-week ceasefire. In return, Iran pledged to allow transit to resume through the Strait of Hormuz.

Oil prices dropped sharply and there was a surge in risk appetite with a 2.0% gain for the FTSE 100 index while the dollar posted sharp losses with the dollar index (DXY) around 98.80 from close to 100 on Tuesday.

A dip in energy prices and a decline in bond yields will alleviate pressure on the UK economy, although both metrics are worse than before the conflict started.

UoB commented; “While the short-term rally appears overdone, there is scope for GBP to rise to 1.3480.” There is also likely to be tough resistance on any approach to the 1.3500 area.

ING noted the importance of energy prices; “Risk assets are rallying as combatants in Iran pull back from the brink. The most impactful news overnight has been Iran’s announcement that it will allow safe passage for traffic through the Strait of Hormuz during this ceasefire.”

MUFG commented; “There are a lot of uncertainties that will persist but having said that, this of course is a step in the right direction and we see this as reducing considerably, over the short-term at least, the risk of a major risk-off and with it a strengthening of the dollar.

It added; “This outcome is a clear bearish outcome for the US dollar.”

According to National Australia Bank head of FX strategy Ray Attrill; “If the strategic waterway is reopened, we could be able to consolidate the risk-on rally that we’re seeing.”

He added; “But a lot has to happen in the next 14 days. Markets still need to proceed with a degree of scepticism.”

ING commented on the dollar; DXY rallied just over 3% through March. It has gapped lower today, and a further sell-off to 98.50 looks possible. However, there remains too much uncertainty to expect a full unwind of the March rally, and it is therefore premature to call for a break under 98.00.”

Rabobank noted the wide range of potential outcomes; “In terms of our macro and market scenarios, the latest news leans towards our base case of fighting being over by mid-April with a slow Hormuz reopening – and on US terms. Obviously, if this pause instead leads to more fighting, we move towards our other, more damaging scenarios.”

ING added; “Don’t expect a complete reversal of March trends, however.”

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