Modified: Thursday, 30 April 2026 10:01 BST

– Written by


David Woodsmith

STORY LINK Pound Sterling to Dollar Forecast: GBP Below 1.35 After Fed Holds Rates

The Pound to Dollar exchange rate (GBP/USD) has edged lower to around 1.3485 after the Federal Reserve held interest rates steady, with markets reacting to a cautious tone and ongoing uncertainty surrounding the Iran situation.

Sterling struggled to hold recent highs near 1.36 as the dollar found modest support following a split policy signal from the Fed, while investors remain wary over whether GBP/USD can sustain upside momentum amid lingering geopolitical and economic risks.

GBP/USD Forecasts: Near 1.35

The Pound to Dollar (GBP/USD) exchange rate found support close to 1.3460 on Tuesday and moved back to the 1.3500 area with caution ahead of key central bank meetings and an on-going focus on energy prices.

Scotiabank commented; “We remain neutral absent a break of the local range roughly bound between 1.3450 and the mid/ upper-1.35s.

Nevertheless, the bank added; “The recent widening of UK-US spreads is extending and threatening fresh highs, offering fundamental support to the GBP. The longer-term trend from January 2025 remains bullish.”

There has been further upward pressure on oil prices with Brent hitting 3-week highs near $107 p/b. There has been no headway in re-opening the Strait of Hormuz which will have a growing impact in squeezing global supply as inventories continue to decline.

Higher energy prices will tend to hamper GBP/USD.

The Federal Reserve will announce the latest policy decision on Wednesday. There are very strong expectations that interest rates will be held at 3.75%.

There will be no updated economic forecasts at this meeting with the focus on the statement and Chair Powell’s comments.

ING commented; “The latest signs from the Middle East are not encouraging. While Powell’s signals may be taken with some caution, given that this should be his last press conference, the risks are that he errs on the hawkish side.”

This is Powell’s last scheduled meeting as Chair with nominee Warsh due to take charge at the next meeting, assuming that he is confirmed in time.

Powell, however, still has a position as Governor. Commonwealth Bank of Australia currency strategist Carol Kong commented; “The question is what Powell is going to do, because he still holds the governor seat until 2028.”

She added; “Powell has previously said that he will stay on if he thinks that Fed independence is under threat, so I think his decision will depend on his perception of Fed independence.”

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TAGS: Pound Dollar Forecasts