– Written by
David Woodsmith
STORY LINK GBP/USD Forecast: Pound Sterling Reclaims Ground Above $1.38
The Pound to US Dollar exchange rate (GBP/USD) edged higher on Thursday, with the pairing moving back towards the four-year high reached earlier in the week.
At the time of writing, GBP/USD was trading near $1.3844, up roughly 0.2% from the start of Thursday’s session.
The US Dollar (USD) remained on the back foot at the beginning of European trade on Thursday, extending a late-session retreat from the previous day.
After enduring sustained selling pressure for much of the past fortnight, the greenback had shown tentative signs of stabilising ahead of the Federal Reserve’s latest policy announcement on Wednesday.
As expected, the Fed left interest rates unchanged at its first meeting of 2026 and adopted a relatively firm tone, reinforcing expectations that borrowing costs will also remain on hold through at least March and April.
However, rather than restoring confidence in the currency, the decision appeared to underscore the Dollar’s current vulnerability. Investors continued to view the USD through a pessimistic lens, allowing selling pressure to resume.
Although Sterling managed to advance against the US Dollar, it failed to build similar gains versus other major currencies on Thursday.
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The Pound remained rangebound, with thin trading conditions persisting amid a continued lack of impactful UK economic releases.
GBP/USD Forecast: Fed Chair Speculation to Drive Volatility?
Looking ahead, the Pound to US Dollar exchange rate could see heightened volatility towards the end of the week if President Trump reveals his nominee to succeed Jerome Powell as Fed Chair.
Earlier comments from Trump suggested an announcement could come ‘soon’, alongside claims that interest rates will ‘come down a lot’ once his preferred candidate takes charge.
If no announcement materialises, attention is likely to shift to the latest US producer price index, where signs of easing factory gate inflation could apply fresh pressure to the US Dollar.
Meanwhile, in the continued absence of meaningful UK data, the Pound may struggle to develop a clear directional bias as the week draws to a close.
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TAGS: Pound Dollar Forecasts
