– Written by


David Woodsmith

STORY LINK GBP to USD Forecast: Pound Sterling Weakens on Equity Selloff, Safe-Haven Demand

The Pound to US Dollar exchange rate (GBP/USD) softened on Tuesday as a sharp equity selloff unsettled investors and pushed demand back toward safer assets.

At the time of writing, GBP/USD was trading around $1.3141, down almost 0.2% from the start of the session.

The US Dollar (USD) inched higher on Tuesday, with risk-off sentiment driving flows into the safe-haven currency.

Mounting concerns over overstretched valuations in AI-linked stocks sparked a wave of caution across global markets, with analysts increasingly warning that the sector may be entering bubble territory.

The mood was further underpinned by a hawkish repricing of Federal Reserve interest rate cut expectations, keeping USD supported through the session.

Sterling struggled to gain traction on Tuesday as investors remained hesitant ahead of next week’s tightly watched autumn budget.

Recent reports have raised more questions than answers regarding Chancellor Rachel Reeves’s fiscal plans. Most notably, Reeves appeared to drop her consideration of an income tax rise, viewed by many economists as the most efficient way to raise revenue and close the estimated £20bn fiscal gap.

Without that lever, Reeves may be forced to rely on a mosaic of smaller tax hikes.

GBP investors fear this approach risks complicating the tax landscape while doing little to revive the UK’s fragile growth outlook.

GBP/USD Forecasts: Soft UK Inflation to Reinforce BoE Rate Cut Bets?

Looking ahead, the Pound to US Dollar exchange rate looks vulnerable on Wednesday as markets brace for the UK’s latest consumer price index.

Economists expect headline inflation to ease from 3.8% to 3.6% in October—the first cooling of prices since May.

A softer reading would likely cement expectations that the Bank of England (BoE) will restart its rate-cutting cycle in December, which could weigh on Sterling.

Also on the radar are the Federal Reserve’s latest meeting minutes. Should the minutes strike a hawkish tone or cast doubt on a December rate cut, the US Dollar may find fresh support.

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TAGS: Pound Dollar Forecasts

The GBPJPY pair continued providing positive trading, noticing its stability above 203.95 and recording some gains by its rally towards 204.50, but stochastic negativity by its attempt to surpass the overbought level that might decelerate the bullish rally in the current period trading.

All that make us prefer the sideways trading, reminding you that the stability above the support at 201,70 forms a main factor for confirming the dominance of the bullish track, therefore, we will keep waiting for gathering extra bullish momentum to ease the mission of recording positive gains by its rally towards 205.25.

The expected trading range for today is between 203.35 and 204.65

Trend forecast: Fluctuated within the bullish track

The EURJPY pair’s stability within the bullish trend that depends on the continuation of forming extra support at 178.00 level, but the contradiction between the main indicators pushes it to form sideways fluctuation by its stability below the psychological barrier at 180.00.

The price might be forced to provide more of the sideways trading until gathering extra positive momentum, to surpass the current barrier and begin forming extra gains by its rally at 180.60 initially reaching the next main target at 181.55.

The expected trading range for today is between 179.30 and 180.60

Trend forecast: Bullish

– Written by


David Woodsmith

STORY LINK British Pound to Dollar Forecast: GBP Pauses <1.32 as Budget, Fed Risks Loom

The Pound-to-Dollar exchange rate (GBP/USD) held around 1.3170 on Monday as markets braced for one of the most important data weeks of the quarter, with UK inflation and delayed US jobs figures set to steer rate expectations on both sides of the Atlantic.

GBP/USD Forecasts: Consolidating Below 1.32

The Pound to Dollar rate has not been able to make another challenge on 1.32 and is trading close to 1.3170 with markets tense ahead of key data releases and braced for further policy hints from the UK government.

The UK 10-year bond yield edged lower to 4.56% from 4.58% which helped stabilise confidence.

According to UoB; “today, we continue to expect GBP to trade between 1.3120 and 1.3200.”

CIBC expects no GBP/USD change by the end of 2025 with a peak at 1.36 for the second quarter of 2026.

UK fiscal and monetary policy developments will be key elements this week with the latest inflation data on Wednesday.

Consensus forecasts are for the headline rate to retreat to 3.6% from 3.8% with the core rate declining slightly to 3.4% from 3.5%. There has been a jump in expectations surrounding a December Bank of England rate cut and softer than expected data would reinforce this trend.

Evidence of sticky inflation, however, would risk a reassessment of the outlook.

As far as fiscal policy is concerned, there is still a high degree of uncertainty and unease over the budget following Friday’s U-turn on income tax hikes.

Scotiabank noted Friday’s hit to confidence; “While the revisions are welcome from a fiscal standpoint, they are worrisome from a market perspective, offering malleability as markets seek stability.”

As far as the US is concerned, the release of the delayed October jobs data is due on Thursday.

Consensus forecasts are for a small increase in non-farm payrolls for the month, but with a high degree of uncertainty while the BLS has indicated that the household data, including the unemployment rate, will not be released.

Fed minutes from October’s meeting will be released on Wednesday.

There has been a further shift in pricing for the December Federal Reserve policy meeting with traders now pricing in only around a 45% chance of a further cut in interest rates.

ING commented; “Presumably, the Federal Reserve is far happier with that kind of pricing, given the lack of available data currently. This also means that the dollar may not have to rally too far on Wednesday evening’s event risk of the FOMC minutes of that 28-29 October policy meeting.”

CIBC expects a decline in labour supply will lessen the risk of higher unemployment and added; “For this reason, we see Powell pausing at the December FOMC meeting, which may put very near-term upwards pressure on the US dollar.”

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TAGS: Pound Dollar Forecasts