Published: Thursday, 28 August 2025 15:30 BST

– Written by


Frank Davies

STORY LINK Pound to Dollar Forecast: Analysts Eye GBP/USD Push Beyond 1.35

The Pound to Dollar exchange rate (GBP/USD) continues to face resistance near the 1.3500 level, with Sterling retreating to just below 1.3450 as the US Dollar holds firm.

Traders remain focused on Federal Reserve uncertainty, with President Trump’s push to oust Fed Governor Cook and gain influence over monetary policy keeping dollar risks elevated.

While ING expects a structural break higher in GBP/USD over time, analysts warn that political pressure on the Fed could spark volatility in the pound to dollar exchange rate outlook.

GBP/USD Forecasts: Break Above 1.35

The Pound to Dollar (GBP/USD) exchange rate has been unable to break above the 1.3500 level and has retreated to just below 1.3450 as the dollar has resisted losses in global markets.

UoB commented; “Although GBP has not been able to make further headway to the upside, as long as 1.3425 holds, there is still a chance for GBP to edge higher.”

SocGen commented on the near-term technical outlook; “Short-term price action may evolve within a range defined by limits of last week low near 1.3385 and 1.3590. A break beyond one of these bands will be crucial for confirming a directional move.”

ING is still positive on the outlook; “In GBP/USD, we still think a structural break above 1.35 is a matter of when rather than if.”

Challenges to the Federal Reserve remain a key market focus with the Administration looking to secure greater control of the Fed policy and interest rates.

Specifically, President Trump remains determined to remove Governor Cook with the likelihood of a legal battle.

Saxo UK investor strategist Neil Wilson is concerned over the longer-term implications; “It’s the latest salvo in the Fed wars and shows how increasingly politicised the central bank is becoming.”

He added; “It’s going to be virtually impossible for the next chair to do anything other than Trump’s bidding. This should be negative for the dollar. The question for markets right now is about the September meeting but be in no doubt that we are witnessing a regime shift like we have not seen in decades.”

There were also reports on Tuesday that the US Administration was looking to take greater control of regional Fed Presidents.

This would be very important given that the Presidents serve on the rate-setting committee through rotation.

MUFG noted the potential risks; “It could give President Trump more influence over lowering rates, resetting financial regulation and adjusting the Fed’s balance sheet policies if he is successful that would have far reaching implications for the global economy and financial markets.

It added; “We continue to believe that the worrying developments could eventually trigger a much bigger sell-off for the US dollar.”

ING expects only a limited short-term impact; “Yet, the FX reaction has been muted and may only play out in the longer run, likely for two reasons. First, Cook is challenging the decision, which will probably end up in court. Second, her departure won’t have a big impact on the next few meetings. With Powell still in charge, markets expect policy to remain data-driven, and the dovish dissent remains too small to push for faster or larger cuts.”

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TAGS: Pound Dollar Forecasts