Modified: Wednesday, 22 April 2026 07:41 BST

– Written by


Frank Davies

STORY LINK Pound Sterling to Dollar Forecast: GBP Holds 1.35 as Iran Ceasefire Extended

The Pound to Dollar exchange rate (GBP/USD) is holding close to 1.3500, with support intact despite ongoing geopolitical tensions and economic uncertainty.

Markets remain range-bound as investors weigh Middle East developments and central bank signals, with GBP/USD trading in a tight 1.34–1.36 range ahead of key US policy updates.

GBP/USD Forecasts: Holding Near 1.35

The Pound to Dollar (GBP/USD) exchange rate has continued to find some support below 1.3500 and is trading close to this level as markets continue to manage elevated economic and political risks.

There are major uncertainties surrounding the Middle East situation, although the overall market moves have been contained with uncertainty whether the next round of bilateral talks in Pakistan will take place. Markets remain hopeful that some form of dialogue will take place which is particularly important given that the current US-Iran ceasefire ends on Wednesday.

Paul Mackel, global head of forex research at HSBC commented; “This binary backdrop of geopolitical risk is keeping a tight grip on forex and as long as talks are happening then the U.S. dollar should be on the backfoot.”

US monetary policy and on-going UK political developments will be market-moving developments.

UoB expects GBP/USD support will hold; “The current price movements are likely part of a range-trading phase, but the firmer underlying tone suggests GBP is likely to trade in a higher range of 1.3500 and 1.3570.”

Scotiabank added; “We look to potential support in the mid/ lower-1.34s around the clustered 50 and 200 day MA’s and look to a near-term range bound between 1.3480 and 1.3580.”

ING does not expect GBP/USD can sustain any gains and has a 12-month GBP/USD forecast of 1.3300.

Fed Chair nominee Warsh is due to face Senate hearings on Tuesday with comments on interest rates watched closely. At this stage, markets are pricing in around a 30% chance of a rate cut on a 6-month view, but Warsh’s comments could change the expected narrative.

ING commented; “Barring comments on the Fed’s balance sheet that unnerve the long-end of the Treasury and risk assets, Warsh’s comments on the policy rate will probably be a bigger driver of the dollar. With oil prices and short-term inflation expectations high at the moment, comments which see short-dated swap rates and real rates come lower will be dollar negative.”

MUFG however, sees the possibility of dollar support; “US rate market participants are of the view he will leave the door open for rate cuts later this year justified by the potentially disinflationary impact of higher productivity growth. If he sounds more hawkish than expected, it could offer some near-term support for the US dollar.”

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TAGS: Pound Dollar Forecasts