– Written by


Ben Hughes

STORY LINK Pound Sterling to Dollar Forecast: GBP Holds Above 1.36 as Starmer Under Pressure

The Pound to Dollar (GBP/USD) exchange rate secured a net gain to 1.3625 on Friday amid a weaker US dollar while the Pound held firm in global markets.

Markets were reacting to the UK local election results and the potential implications for Prime Minister Starmer after heavy Labour losses increased pressure on his leadership.

There is still uncertainty over how much political risk has been priced into Sterling markets.

Friday’s US jobs report will also be a key element for the dollar.

GBP/USD Forecasts: Holding Near 1.136

Local election results released o Friday confirmed major Labour losses across England, Scotland and Wales, with Reform UK and the Greens making strong gains.

According to Danske Bank; “Gilt markets are sensitive to this outcome, as it could signal a shift towards a more lenient fiscal policy.”

Nick Rees, head of macro research at Monex Europe, still considers that there are Pound risks.

He stated; “No one wanted to be the leader who would wear the local election loss. That risk is out of the way now, so regardless of what happens, Starmer’s more vulnerable.”

He added; “Markets haven’t priced that in but they will at some point.”

As far as geo-politics are concerned, Iran stated that it was reviewing a US peace proposal that sources indicated would formally end the war but leave unresolved key US demands that Iran suspend its nuclear programme and reopen the Strait of Hormuz.

MUFG commented; “Overall, the latest developments add to investor confidence that the US and Iran continue to make progress to find a diplomatic solution to end the conflict and re-open the Strait.”

It added; “The improvement in global investor risk sentiment and drop in energy prices is providing a tailwind for emerging market currency performance.”

RBC Capital Markets head of global commodity strategy Helima Croft injected a note of caution.

According to Croft; “It remains far from clear that there is any material movement toward reopening the Strait, or if we are instead stuck in a rebranded ‘ceasefire with no oil’ purgatory.”

The dollar index was trading around 97.85.

ING noted that dollar moves have been correlated strongly with equity markets with a firm tone undermining any defensive dollar demand.

It added; “Any major further leg lower in the USD still requires a strong equity session, regardless of oil moves.”

According to the bank; “The strength in risk assets and more balanced positioning suggest that DXY can easily fall back below the 97.50 pre-war levels, even if oil prices settle significantly above February levels.”

Labour’s heavy local election losses have intensified speculation surrounding Starmer’s long-term position, although the Prime Minister has insisted he will remain in office despite mounting pressure from some MPs.

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

– Written by


Ben Hughes

STORY LINK Pound Sterling to Dollar Forecast: GBP Firm as Starmer Faces Election Fallout

The Pound to Dollar (GBP/USD) exchange rate held above the 1.3600 level on Friday as Sterling remained relatively resilient despite mounting political pressure on Prime Minister Keir Starmer following heavy Labour losses in the UK local elections.

Currency markets continued to monitor the political fallout after results showed Reform UK and the Green Party making substantial gains at Labour’s expense, increasing speculation over Starmer’s long-term leadership position and the potential implications for UK fiscal policy.

The US Dollar remained generally weaker amid firm global risk appetite and expectations surrounding Friday’s US jobs report.

The Pound secured net gains on Thursday amid a softer dollar tone while investors waited for the full local election results and the potential implications for Starmer’s leadership.

According to Danske Bank; “Gilt markets are sensitive to this outcome, as it could signal a shift towards a more lenient fiscal policy.”

Initial results released overnight confirmed severe Labour losses across England, Scotland and Wales, intensifying questions over Starmer’s authority within the party.

Nick Rees, head of macro research at Monex Europe, warned that markets were still underestimating Sterling risks.

He stated; “No one wanted to be the leader who would wear the local election loss. That risk is out of the way tomorrow, so regardless of what happens, Starmer’s more vulnerable.”

He added; “Markets haven’t priced that in but they will at some point.”

ING maintained a cautious stance on Sterling and argued that the Pound remained exposed to further political fallout following Labour’s weak performance.

Political Uncertainty Builds Around Starmer

Pressure on Starmer intensified after Labour suffered one of its worst local election performances in decades, with growing criticism from within the party and renewed speculation over possible leadership challengers.

Reuters reported that more than 20 Labour MPs had privately or publicly raised concerns over Starmer’s future following the results.

Markets remain particularly sensitive to the possibility that Labour could respond to the election setback with a looser fiscal stance or a shift towards more left-leaning policies.

According to ING; “The pound and gilts are currently embedding no visible political risk premium.”

The bank warned there remained scope for Sterling weakness if investors became more concerned over fiscal sustainability and political instability.

Dollar Held Back by Firm Risk Appetite

As far as geo-politics are concerned, Iran stated that it was reviewing a US peace proposal that sources indicated would formally end the war but leave unresolved key US demands that Iran suspend its nuclear programme and reopen the Strait of Hormuz.

MUFG commented; “Overall, the latest developments add to investor confidence that the US and Iran continue to make progress to find a diplomatic solution to end the conflict and re-open the Strait.”

It added; “The improvement in global investor risk sentiment and drop in energy prices is providing a tailwind for emerging market currency performance.”

RBC Capital Markets head of global commodity strategy Helima Croft injected a note of caution.

According to Croft; “It remains far from clear that there is any material movement toward reopening the Strait, or if we are instead stuck in a rebranded ‘ceasefire with no oil’ purgatory.”

The dollar index traded near 97.85 as the US currency continued to track broader market sentiment.

ING noted that recent dollar moves remained closely correlated with equity markets.

It added; “Any major further leg lower in the USD still requires a strong equity session, regardless of oil moves.”

According to the bank; “The strength in risk assets and more balanced positioning suggest that DXY can easily fall back below the 97.50 pre-war levels, even if oil prices settle significantly above February levels.”

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

The GBPJPY pair settles in sideways range near 212.80 level, affected by the contradiction of the main indicators, to delay activating the previously suggested negative trend.

The price might recover more of the losses by its rally towards 213.50, reaching the moving average 55 near 213.85, but it will not affect the main bearish scenario, depending on the continuation of forming main barrier at 214.30 level against the current trading, note that breaking 211.80 level will ease the mission of forming strong waves, to expect reaching 211.20, repeating the pressure on 210.45 support.

The expected trading range for today is between 211.80 and 213.50

Trend forecast :fluctuated