Modified: Friday, 3 October 2025 07:00 BST

– Written by


Ben Hughes

STORY LINK Pound to Dollar Forecast: Bond-Market Jitters Keep GBP Under Pressure

The Pound to Dollar exchange rate (GBP/USD) continues to stall at resistance near 1.3520, with UoB analysts expecting range trading between 1.3360 and 1.3525. Scotiabank is more upbeat, highlighting Sterling’s recovery above its 50-day MA as scope for a sustained push higher, though bond-market jitters remain a core risk.

GBP/USD Forecasts: Unable to Break Resistance

The Pound to Dollar rate again challenged resistance above 1.3500 on Thursday but failed to hold the gains and retreated to near 1.3450 with another bout of anxiety over UK bonds. Key resistance remains in place around 1.3520/5.

According to UoB; “Yesterday, GBP rose briefly and slightly above 1.3525 (high was 1.3527), before retreating quickly. There has been no clear increase in upward momentum, and we continue to expect GBP to trade between 1.3360 and 1.3525 for now.”

Scotiabank is more confident over the outlook; “We are reassured by the GBP’s push back above its 50 day MA (1.3463) and see scope for a sustained push back above 1.35.”

Longer-term MUFG is not forecasting a GBP/USD move above 1.40 despite dollar vulnerability.

Domestically, the bond market remains a key focus with the latest auction on Thursday.

Scotiabank commented; “The UK bond market is once again in focus, as the latest 10Y gilt auction generated the lowest oversubscription rate since December 2023. The UK’s fiscal outlook remains a core risk for the GBP into the November 26 budget release.

The 10-year yield increased to 4.75% from below 4.70% before a retreat to 4.72%.

Markets remain wary over the risk of bonds and the Pound weakening in tandem.

The latest US Challenger data recorded a decline in layoffs to just over 54,000 for September from close to 73,000 the previous year.

For the first nine months of the year, layoffs are still 55% higher than the previous year with the highest figure since 2020.

The layoffs data overall offered some encouragement, but Scotiabank focussed on yesterday’s ADP jobs data.

According to the bank; “ADP is down for two consecutive months and negative in three of the past four. That is hard to ignore as a clear sign of more pronounced labour market weakness.”

The US Supreme Court ruled on Wednesday that Fed Governor Cook is allowed to remain in post for now. The court will hear arguments in January over President Trump’s attempt to fire her.

IG market analyst Tony Sycamore commented; “Market concern about the Fed’s independence now moves to the backburner for the next few months.”

MUFG still pointed to longer-term risks; “Without an open Fed Governor seat, President Trump will now likely need to use Stephen Miran’s seat to potentially bring in his candidate to be the next Fed Chair unless he picks an existing Fed Governor to be the next Fed Chair.”

The bank added; “The likelihood of further Fed rate cuts and ongoing threats to the Fed’s independence from the Trump administration are important reasons why we continue to expect further US dollar weakness in the year ahead.”

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