Modified: Thursday, 16 April 2026 07:21 BST

– Written by


Ben Hughes

STORY LINK Pound Sterling to Dollar Forecast: GBP Hits 2-Month Best as US Stocks Surge

The Pound to Dollar exchange rate (GBP/USD) surged to two-month highs above 1.3580, with Sterling emerging as a best buy amid a rally in global equities and improving confidence over easing Middle East tensions.

Improving risk appetite has boosted GBP demand while the dollar remains under pressure, although markets are cautious that resistance around 1.36–1.37 could limit further gains.

GBP/USD Forecasts: Pound Hits 2-Month Highs

The Pound to Dollar (GBP/USD) exchange rate hit a 2-month peak just above 1.3580 on Tuesday before a limited correction to near 1.3550.

The Pound continued to demonstrate resilience while the dollar lost ground again as markets anticipated a resolution to the Iranian conflict with oil prices posting significant losses. A key element will be whether this optimism is justified and whether the dollar will continue to weaken.

According to UoB; “Further GBP strength would not be surprising, but given the overbought short-term conditions, the next technical target at 1.3645 may not come into view so soon.”

Scotiabank is broadly positive over the GBP/USD outlook; “We see limited resistance between current levels and the mid-Feb peaks around 1.37 and now look to support below 1.3450.”

There are hopes that US and Iran will hold another round of talks as pressure on Iran and the US continues to build.

IG market analyst Tony Sycamore commented; “There is a growing expectation that the standoff will soon be resolved, allowing the U.S. administration to pivot towards declaring victory, before stimulating the economy ahead of the midterms.”

ING added; “Markets have grown more confident that the Middle East crisis is moving toward a resolution, with the US and Iran arranging a second round of talks, and Tehran seemingly willing to halt shipments to avoid testing the US naval blockade.”

The bank still expressed significant caution; “Given how unsuccessful the first round of negotiations was last weekend, these dollar levels seem to embed a fair amount of premature optimism. As such, the balance of risks is increasingly skewed to the upside for USD.”

MUFG considers that underlying dollar sentiment has deteriorated; “The failure of the US dollar to advance as much as we expected since the start of the conflict and the emerging signs of increased appetite for selling is an indication of the poor fundamental backdrop for the dollar ahead of the start of the conflict.”

Underlying economic trends will also be an important element and feed into the dollar narrative.

The US NFIB small business confidence index dipped to 95.8 for March from 98.8 previously. According to the NFIB; “the dramatic spike in oil prices has spooked consumers and owners alike.”

Fed Chair nominee Warsh’s Senate confirmation hearing is scheduled for April 21st.

At this stage, markets are not pricing in a Fed rate hike with around a 30% chance of at least one cut before year-end. Comments from Warsh will be important for market pricing and a dovish stance would hurt the US currency.

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts