April 24, 2025 – Written by Frank Davies

STORY LINK GBP/USD Forecast: Pound Sterling Bullish, Next Resistance at 1.34

The Pound to Dollar exchange rate (GBP/USD) again found support close to 1.3250 and traded close to 1.3300 in Europe on Wednesday as the dollar retreated from Wednesday’s highs.

Volatility has eased to some extent, but underlying stresses remain substantial with choppy trading.

According to Scotiabank; “We look to near-term support between 1.3220 and 1.3250 and resistance between 1.3400 and 1.3420.”

MUFG is still not convinced that there is a lot of mileage in the dollar rebound; “While further steps to water down/reverse tariffs would be positive developments, we are not convinced that recent developments are sufficient yet to support a more sustained rebound for the US dollar at the current juncture.”

There have been further media headlines suggesting that the Trump Administration is planning a more conciliatory stance towards tariffs, although the underlying details have tended to be less favourable, reinforcing uncertainty.

According to Rabobank; “Pantomime policies produce pantomime markets.”

It added; “This has been fully evident in the oscillating price action in recent sessions with Trump’s ‘he’s behind you, oh no he isn’t!’ approach to governing not only prompting market reversals but even arguably resulting in the same driver provoking two diametrically-opposed reactions.”

Scotiabank commented; “The positive spin on trade reflects the reality that, at this point, the US may need an off-ramp more than China does. The Chinese leadership has not picked up the phone for the White House by some accounts and talks with China on trade have not been held even at low diplomatic levels.

It added; “It seems that there is little appetite in China to make concessions and any agreement is a long way off. Relief for the USD may be temporary as trade uncertainty will continue to shade US economic prospects.”

Underlying economic pressures will build quickly amid logistics challenges and pricing pressures.

According to Rabobank; “with a de facto US-China trade embargo in place, the US economy could see shortages on shelves within weeks and/or of price rises; and even if there is a tariff U-turn, logistics would then be overwhelmed.”

The Beige Book reported that the outlook in several districts worsened considerably as economic uncertainty around tariffs rose. Immediate pricing dynamics were little changed, but most Districts noted that firms expected elevated input cost growth resulting from tariffs.

There is still a high degree of uncertainty, especially given lags and attempts to buy goods ahead of price increases and there will be mixed official data in the short term.

At this stage, markets are pricing in just below a 60% chance of a June rate cut, but the Fed will be in a very difficult position if inflation pressures increase.

MUFG commented; “The US dollar could derive more support going forward if the US economy does not slow as much as feared making it harder for the Fed to cut rates as much as currently priced in.”

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TAGS: Pound Dollar Forecasts