Modified: Wednesday, 26 November 2025 22:35 BST

– Written by


David Woodsmith

STORY LINK GBP to USD Forecast: Pound Sterling Breaks Above $1.32 After Budget Boost

The Pound-to-Dollar exchange rate (GBP/USD) climbed above $1.32 on Wednesday as UK Chancellor Rachel Reeves delivered her autumn budget.

At the time of writing, GBP/USD was trading around $1.3207, up roughly 0.3% from its opening levels.

The Pound (GBP) strengthened through Wednesday as Chancellor Rachel Reeves finally unveiled her much-anticipated autumn budget, ending weeks of uncertainty.

Sterling was boosted by refreshed forecasts from the Office for Budget Responsibility (OBR), which pointed to stronger growth prospects in 2025 than previously expected.

Investor confidence was also helped by the bond market reaction, with a drop in UK gilt yields signalling broad approval of Reeves’s fiscal package.

The US Dollar (USD) remained under pressure on Wednesday, with demand for the safe-haven currency fading amid a wave of improved risk appetite.

A key driver of the upbeat mood was renewed optimism surrounding a potential peace deal between Ukraine and Russia, with reports suggesting encouraging progress in ongoing talks.

Further weighing on the Dollar were increasingly dovish expectations for future Federal Reserve policy.

Markets continue to price the possibility of a December rate cut, while speculation over Fed leadership added another layer of caution.

White House Economic Adviser Kevin Hassett is now widely seen as a frontrunner to replace Jerome Powell next year – a potential shift that could tilt the Fed in a more dovish direction.

GBP/USD Forecast: Post-Budget Analysis to Drive Sterling Volatility

Looking to Thursday, deeper scrutiny of the autumn budget is likely to influence further movement in the Pound to US Dollar exchange rate.

Investors will assess how Reeves’s tax and spending plans may shape Bank of England (BoE) monetary policy – particularly whether tighter fiscal settings increase pressure on policymakers to support growth through additional rate cuts.

Meanwhile, with US markets closed for Thanksgiving, lighter trading conditions could leave the Dollar more vulnerable to shifts in overall risk appetite. If optimism holds, USD may struggle to regain momentum.

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TAGS: Pound Dollar Forecasts