– Written by
David Woodsmith
STORY LINK GBP/USD Forecast: Pound Sterling Near Six-Month Best Exchange Rate
The Pound to US Dollar exchange rate (GBP/USD) opened the new week on strong footing, pushing to a fresh six-month high as broad-based selling pressure continued to undermine the US Dollar.
At the time of writing, GBP/USD was trading close to $1.3671, representing a gain of around 0.3% compared with Monday’s opening levels.
The US Dollar (USD) remained on the back foot at the start of the week, extending a sell-off that dragged the currency to multi-month lows in the previous session.
Fresh pressure on the Greenback followed renewed tariff threats from US President Donald Trump, who warned of imposing 100% tariffs on Canada should it strike a trade agreement with China. Trump argued such a deal would effectively turn Canada into a gateway for Chinese goods entering the US market.
These remarks have heightened investor unease around US trade and foreign policy, with markets increasingly unsettled by the unpredictability of the Trump administration.
Adding to the negative tone for the Dollar were renewed concerns over a potential US government shutdown, after Senate Democrats pledged to block funding for the Department of Homeland Security following the death of another US citizen at the hands of federal agents over the weekend.
Despite its strength against the US Dollar, the Pound (GBP) struggled to generate notable gains against other major currencies.
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Sterling traded in a relatively narrow range amid a quiet UK economic calendar, following a week packed with high-profile data releases.
Investor caution was also fuelled by lingering domestic political uncertainty, with speculation over internal Labour Party tensions weighing on broader confidence in the UK outlook.
GBP/USD Forecast: Fed Leadership in Focus
Looking ahead, attention is likely to centre on the anticipated announcement of Donald Trump’s nominee to succeed Jerome Powell as Chair of the Federal Reserve, a development that could drive significant volatility in GBP/USD.
Should the chosen candidate be viewed as supportive of more aggressive interest rate cuts, the US Dollar may face renewed selling pressure.
Conversely, a nomination perceived as safeguarding Federal Reserve independence could help the Greenback recover some of its recent losses.
In the meantime, with little in the way of major UK data releases scheduled, movement in the Pound is expected to remain closely tied to global risk appetite and broader market dynamics.
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TAGS: Pound Dollar Forecasts
