GBP/USD Forecast and News
GBP/USD consolidates ahead of Bank of England rate decision
The Pound Sterling traded in a narrow range against the US Dollar on Tuesday, edging modestly higher to near 1.3700 as markets adopted a cautious stance ahead of the Bank of England's first policy decision of 2026. GBP/USD opened the session at 1.3665 and touched an intraday high near 1.3707, with the pair consolidating below the multi-year high of 1.3869 posted in late January.
Latest Pound Sterling News
GBP/USD Technical Overview
The 100-hour Simple Moving Average (SMA) trends higher, and the GBP/USD pair holds above it, maintaining a mild bullish bias. The SMA stands at 1.3759 and offers nearby dynamic support. The Moving Average Convergence Divergence (MACD) line sits below the Signal line near the zero level, with a small negative histogram that suggests fading momentum. The Relative Strength Index (RSI) at 43 remains below the midline, reflecting subdued strength.
Measured from the 1.3344 low to the 1.3871 high, the 23.6% Fibonacci retracement level at 1.3747 offers initial support, and holding above it could keep the intraday tone supported. The rising 100-period SMA underpins the structure as price consolidates just above it. The MACD line remains below the Signal line around the zero mark, while the contracting negative histogram hints at stabilizing pressure. RSI at 43 stays neutral to soft, and a move through 50 could improve momentum.
On pullbacks, the 38.2% retracement at 1.3670 marks the next support, and a break beneath it would warn of a deeper correction within the broader upswing.
Fundamental Overview
Democrats and the White House have reached an agreement to temporarily fund the Department of Homeland Security as lawmakers rush to pass the spending package by Friday to avoid a partial US government shutdown. This assists the USD Index (DXY), which tracks the Greenback against a basket of currencies, to move further away from a four-year trough set on Tuesday. Despite the bounce, the USD remains on track to register its second straight week of losses amid economic and policy risks on the back of US President Donald Trump’s erratic decisions, and attacks on the Federal Reserve’s (Fed) independence.
In fact, Trump on Thursday announced his plans to decertify all Canada-made aircraft, accusing the latter of unfairly blocking certification of Gulfstream business jets. Trump threatened to impose a 50% tariff on all aircraft sold from Canada into the US until American-made Gulfstream jets receive certification in Canada, fueling concerns about a full-blown trade war between the two North American countries amid the rising risk of a military conflict with Iran. Adding to this, the White House said that Trump signed an executive order that would impose tariffs on countries that provide Crude Oil to Cuba.
Meanwhile, Trump took another jab at the Fed Chair Jerome Powell and said on Truth Social that the US central bank should substantially lower interest rates. Earlier this week, the Fed resisted the unprecedented political pressure and decided to leave rates unchanged while signaling that it would continue to adopt a cautious approach. All eyes are now on the announcement of Trump's pick to replace Jerome Powell as the next Fed chair. Reports suggest that the Trump administration is preparing to nominate former Fed Governor Kevin Warsh to be the next Chair later this Friday.
Nevertheless, investors remain worried about the freedom of monetary authorities from direct political interference in formulating policies. Moreover, traders are still pricing in the possibility of two more rate cuts by the Fed in 2026, which should keep a lid on the Greenback. The British Pound (GBP), on the other hand, might continue to be underpinned by supportive fundamentals, which tempered near-term Bank of England (BoE) rate cut expectations. This contributes to limiting losses for the GBP/USD pair, making it prudent to wait for strong follow-through before confirming that spot prices have topped out.
SPECIAL WEEKLY GBP/USD FORECAST
Interested in weekly GBP/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the Pound-Dollar pair. Here you can find the most recent forecast by our market experts:
GBP/USD: Pound Sterling eyes more upside, with Golden Cross in play Premium
The Pound Sterling (GBP) accelerated its bullish momentum against the US Dollar (USD), with GBP/USD recording its highest level in four years near 1.3870 before experiencing a late pullback.
Latest GBP Analysis
Editors' picks
AUD/USD bulls have the upper hand amid divergent RBA-Fed outlooks
The AUD/USD consolidates the previous day's hawkish RBA-inspired gains above the 0.7000 mark, as a slight deterioration in risk sentiment benefits the safe-haven US Dollar and acts as a headwind for the Aussie. However, the diverging Fed-RBA rate paths favor bulls, suggesting that any corrective slide is more likely to get bought into and remain limited.
EUR/USD clings to daily gains above 1.1800
EUR/USD keeps the fresh bid bias around the 1.1800 region as the NA session draws to a close on Tuesday. The pair’s decent bounce comes on the back of fresh downside pressure on the US Dollar as investors continue to fade the so-called “Warsh trade”. Next of note on the euro docket will be the preliminary inflation data in the euro zone on Wednesday.
Gold recovers above $4,950 as US-Iran tensions boost safe-haven demand
Gold price trades in positive territory near $4,985 during the early Asian session on Wednesday. The precious metal extends the rebound after a historic and volatile sell-off last week. Traders weigh the next round of US economic signals and the broader demand for safe-haven assets.
Crypto winter began in January 2025, but end is near: Bitwise
The crypto market has been in a "full-blown" winter season since January 2025, following a 39% and 53% drop in Bitcoin (BTC) and Ethereum (ETH) prices from their all-time highs over the past few months, according to Bitwise Chief Investment Officer Matt Hougan.
Gold and silver recovery continues, but equities sink as tech is shunned
The risk recovery is on pause as we move through Tuesday. After signs that a recovery in precious metals could boost overall risk appetite earlier today, a nasty sell off in tech stocks has pushed the Nasdaq and the S&P 500 down by 1.7% and 1.1% respectively.
Majors
Cryptocurrencies
Signatures
GBP/USD YEARLY FORECAST
How could GBP/USD move this year? Our experts make a GBP/USD update forecasting the possible moves of the pound-dollar pair during the whole year. Don't miss our 2025 GBP/USD forecast!
GBP/USD 2025 FORECAST
In the GBP/USD 2025 Forecast, FXStreet Senior Analyst Dhwani Mehta indicates divergence between United States Federal Reserve (Fed) and Bank of England (BoE) monetary policy expectations and Donald Trump’s announced protectionist measures may strengthen the US Dollar (USD).
The Fed is signaling a more cautious approach to monetary policy as it navigates strong economic growth and rising inflationary pressures under the new Trump administration.
In contrast, the Bank of England has adopted a more dovish stance amid a fragile UK economy. Market expectations are pricing in up to three quarter-point cuts in 2025.
From a technical point of view, the GBP/USD pair faces further downside after breaking below the 18-month rising wedge support at 1.2682, with the RSI in negative territory. Key support levels are 1.2037, 1.1802, and 1.1500, potentially leading to the 1.1000 mark. Recovery attempts face resistance at 1.2900, with bullish momentum only confirmed above 1.3490.
MOST INFLUENTIAL FACTORS IN 2025 FOR GBP/USD
The year will be politically marked by Trump’s return to the White House. A Republican government is seen as positive for financial markets, but Trump’s pledge to cut taxes and impose tariffs on foreign goods and services may introduce uncertainty to both the political and economic landscape.
Influential Institutions & People for the GBP/USD
The Pound VS Dollar can be seriously affected by news or the decisions taken by two main central banks:
The Bank of England (BoE)
Founded in 1694, the Bank of England (BoE) is the central bank of the United Kingdom (UK). Known as ‘The old lady of Threadneedle Street’, the bank’s mission is "to promote the good of the people of the United Kingdom by maintaining monetary and financial stability".
The Bank of England is responsible for maintaining the UK’s economic stability. It operates monetary policy by adjusting the Bank Rate and, in certain circumstances, supplements this with measures such as quantitative easing.
The Bank of England decides monetary policy for the United Kingdom. Its primary goal is to achieve a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
The official website, on X and YouTube
The Federal Reserve (Fed)
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website, on X and Facebook
Andrew Bailey
Andrew Bailey has been the Governor of the BoE since March 2020 and his appointment ends on March 2028. Previously, he served in the BoJ as its Chief Cashier, Deputy Governor for Prudential Regulation and Chief Executive of the Financial Conduct Authority.
Bailey on BoE's profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. He was sworn in on May 23, 2022, for a second term as Chairman ending May 15, 2026. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
BOE NEWS & ANALYSIS
FED NEWS & ANALYSIS
About GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', referring to the most important and widely traded pairs in the world. The pair is also known as “the Cable”, a term originating in the mid-19th century that refers to the first transatlantic telegraph connecting Great Britain and the United States.
As a closely watched and widely traded currency pair, it features the British Pound as the base currency and the US Dollar as the counter currency. For that reason, macroeconomic data from both the United States and the United Kingdom significantly impacts its price. One notable event that affected the volatility of the pair was Brexit.
Related pairs
EUR/USD
The EUR/USD is one of the most widely traded currency pairs in the Forex market, where the Euro serves as the base currency and the US Dollar as the counter currency. It accounts for more than half of the total trading volume in the Forex market, making gaps almost inexistent, let alone sudden reversals caused by breakaway gaps.
The EUR/USD is usually quiet during the Asian session, as economic data influencing the pair is usually released during the European or US sessions. Activity increases as European traders begin their day, leading to heightened trading volume. This activity slows around midday during the European lunch break but picks up again when US markets come online.
USD/JPY
The USD/JPY (US Dollar Japanese Yen) currency pair is one of the 'Majors', a group of the most important currency pairs in the world. The Japanese Yen, known for its low interest rate, is frequently used in carry trades, making it one of the most traded currencies worldwide. In the USD/JPY pair, the US Dollar is the base currency and the Japanese Yen serves as the counter currency.
Trading USD/JPY is also known as trading the "ninja" or the "gopher", although the latter nickname is more frequently associated with the GBP/JPY pair. USD/JPY usually has a positive correlation with other pairs like USD/CHF and USD/CAD, as all three use the US Dollar as the base currency. The value of the pair is often influenced by interest-rate differentials between the two central banks: the Federal Reserve (Fed) and the Bank of Japan (BoJ).