Modified: Thursday, 12 November 2026 20:46 BST

– Written by


David Woodsmith

STORY LINK GBP/USD Forecast: Pound Sterling Falls to Near One-Month Low

The Pound to US Dollar (GBP/USD) exchange rate fell to its weakest level in almost a month overnight on Wednesday as a sharp sell-off in technology stocks drove investors towards the safe-haven US Dollar.

At the time of writing, GBP/USD was trading at around $1.3258, having recovered slightly from an overnight low of $1.3251. However, Sterling remained under pressure despite encouraging UK economic growth figures.

The US Dollar (USD) strengthened during Wednesday evening’s session as heightened risk aversion across global financial markets increased demand for safer assets.

A sharp decline in technology stocks unsettled investors, with controversy surrounding US chipmaker Nvidia adding to concerns about the outlook for the sector.

The initial reports centred on allegations that Nvidia CEO Jensen Huang had been involved in an affair with a businesswoman suspected of spying for China.

The controversy intensified on Wednesday evening following further reports alleging a second affair involving a Nvidia executive.

These claims, which remain allegations, prompted speculation that the company’s board could be preparing to remove Huang as chief executive.

The uncertainty weighed on sentiment towards technology stocks, a sector that has attracted substantial investment amid the rapid expansion of artificial intelligence infrastructure.

With investors already cautious about elevated technology valuations, the latest developments contributed to a broader deterioration in market sentiment.

The resulting demand for safe-haven assets helped the US Dollar maintain its recent strength, leaving the currency trading close to monthly highs.

Geopolitical developments also supported the ‘Greenback’.

Hopes of a diplomatic breakthrough between Washington and Tehran appeared to fade, raising concerns that the conflict in the Middle East could continue.

The prospect of prolonged tensions encouraged investors to adopt a more defensive approach, providing another source of support for the Dollar.

The Pound (GBP), meanwhile, struggled to recover despite the release of stronger UK economic growth figures.

Data from the Office for National Statistics (ONS) showed that the British economy expanded by 0.7% during the third quarter, accelerating from 0.5% in the previous three months.

The reading marked the UK’s strongest quarterly growth in more than two years, offering some reassurance about the economy’s resilience despite elevated borrowing costs.

However, the figures were broadly in line with market expectations, limiting their ability to generate fresh demand for Sterling.

Investors had already anticipated an improvement in economic activity, meaning the release offered little reason to substantially revise expectations for the Bank of England’s (BoE) monetary policy outlook.

The stronger growth figures may provide some reassurance that the UK economy can withstand further interest rate increases, particularly following last week’s decision to raise Bank Rate to 4%.

Nevertheless, concerns about persistent inflation and the potential impact of additional monetary tightening continue to complicate the outlook for Sterling.

The Pound was also held back by the deterioration in global risk appetite.

As an increasingly risk-sensitive currency, Sterling often struggles when investors become more cautious and favour the relative security of the US Dollar.

This left GBP/USD unable to stage a convincing recovery, despite the encouraging domestic economic figures.

Near-Term GBP/USD Forecast: Could US Inflation Data Push Sterling Below $1.32?

The Pound to US Dollar exchange rate could face further pressure on Friday as investors turn their attention to the latest US producer price index (PPI).

October’s factory-gate inflation figures are expected to show another increase in prices, although the pace of monthly growth is forecast to have moderated.

The release will be closely watched following Tuesday’s stronger-than-expected US consumer inflation figures, which reinforced expectations of further Federal Reserve interest rate increases.

Another upside inflation surprise could strengthen the case for additional monetary tightening, potentially providing further support for the Dollar.

If the figures encourage investors to anticipate a more aggressive approach from the Federal Reserve, GBP/USD could extend its recent decline.

The $1.3250 area represents an immediate reference point following Thursday’s overnight low.

A sustained move below this level could expose Sterling to further selling pressure, potentially bringing the psychologically important $1.3200 threshold into focus.

However, softer-than-expected US producer inflation could offer the Pound some relief by reducing expectations of further aggressive interest rate increases.

Broader market sentiment will also remain an important influence.

Further developments surrounding Nvidia could affect confidence in technology stocks, particularly if the controversy leads to additional uncertainty over the company’s leadership.

A renewed sell-off across the sector could encourage investors to seek the relative safety of the US Dollar, placing additional pressure on GBP/USD.

Geopolitical developments may also influence the pairing, with investors continuing to monitor diplomatic efforts between the US and Iran.

Any escalation in tensions could reinforce demand for safe-haven currencies, while signs of progress towards a negotiated settlement may help restore risk appetite.

For Sterling, Thursday’s stronger UK GDP figures offer some underlying reassurance, but the Pound may struggle to capitalise on the data while global markets remain unsettled.

With GBP/USD trading around $1.3258, a recovery towards $1.3300 may depend on an improvement in market sentiment or a softer US inflation reading.

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TAGS: Pound Dollar Forecasts