Modified: Tuesday, 28 April 2026 10:31 BST

– Written by


Ben Hughes

STORY LINK Pound Sterling to Dollar Forecast: GBP Climbs Above 1.3550 as USD Retreats

The Pound to Dollar exchange rate (GBP/USD) has climbed to 10-day highs above 1.3550, as the dollar softened ahead of key central bank decisions and shifting expectations for Federal Reserve policy.

Sterling has also drawn support from expectations of a relatively hawkish Bank of England stance, although elevated energy prices, geopolitical uncertainty, and weak UK retail data continue to pose risks to further gains.

GBP/USD Forecasts: Advances to 10-Day Highs

The Pound to Dollar (GBP/USd) exchange rate advanced to 10-day highs just above 1.3550 on Monday. The dollar index retreated to around 98.30 as the US currency lost ground.

The Pound also held firm amid expectations of a relatively hawkish Bank of England policy statement on Thursday. There are, however, also significant UK economic risks, illustrated by a notably downbeat CBI retail sales survey with the headline reading at a record low.

SEB has a year-end GBP/USD forecast of 1.36 with the dollar and Pound both posting notable losses in global markets.

Markets were continuing to monitor Iran developments and energy prices. Formal negotiations have not resumed, but there are reports that Iran had proposed opening the Strait of Hormuz if nuclear talks are delayed.

European equities secured limited gains, but oil prices increased again.

According to ING; “DXY is offered again on the Iranian news, but with oil prices staying high and central banks yet to react, we caution against chasing it lower again too soon.”

Bank of America commented; “we expect more 2-way risks from here as progress is elusive and oil supply remains an issue.”

Federal Reserve policy and guidance will also be a key element this week with the latest interest rate decision due on Wednesday. At the end of last week, the US Justice Department announced that it had dropped its criminal investigation into Federal Reserve Chair Jerome Powell.

MUFG commented; “The developments make it more likely that Kevin Warsh will replace Jerome Powell as Fed Chair when his term expires on 15th May, although it remains unclear if Jerome Powell will also step down from the Board of Governors given the lingering threat to re-open a criminal investigation.

It added; “The US rate market still judges that there is a higher probability that the next Fed policy move will be a cut rather than a hike remaining a headwind for the US dollar.”

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TAGS: Pound Dollar Forecasts