Pound to Dollar Near-Term Forecast: GBP to Retest 1.3615, if 1.35 Holds

June 9, 2025 - Written by Frank Davies

STORY LINK Pound to Dollar Near-Term Forecast: GBP to Retest 1.3615, if 1.35 Holds

The Pound to Dollar rate (GBP/USD) dipped to near 1.3500 on Friday after the US jobs data before rebounding to just above 1.3550 on Monday. Last week’s 39-month high close to 1.3615 will remain the key focus.

According to UoB; “The price action has led to a slowdown in momentum, but as long as 1.3500 is not breached, there is a chance for GBP to retest 1.3615 before the risk of a more sustained and sizeable pullback increases.”

Scotiabank commented; “An extension of gains above 1.36 should find limited resistance ahead of the early 2022 high around 1.3750.”

The economic diary is very light on Monday and the US Federal Reserve is in its blackout period with markets set to focus on political developments.

US and Chinese officials are due to discuss trade issues in London with markets watching the overall temperature between the two sides.

MUFG commented on a relatively limited agenda; “The key to watch for today include the US-China trade talks, which are expected to focus on rare earth exports on the China side, coupled with various controls and restrictions including on semiconductors on the US side.”

Positive smoke signals could provide some net dollar support while a bruising meeting would hurt sentiment.


Saxo Markets chief investment strategist Charu Chanana commented; "A deal to keep talking might be better than nothing, but unless we see a concrete breakthrough, the impact on sentiment is likely to remain muted."

Traders will also be monitoring the unrest in Los Angeles with some risk to the dollar if protests spread to other major cities.

The US currency gained ground on Friday after the latest US jobs data, but markets remain wary over both the economy and the dollar.

Danske Bank commented on the US outlook; “We downgrade our US growth forecasts amid the trade war, but do not expect an outright recession.”

Civil unrest in the US could add to global concerns the underlying dollar fundamentals and risk of capital outflows.

CIBC commented; “While we have seen FX hedging activity increase, and some large asset managers suggesting that they are considering diversifying outside of the US, the flows data has yet to show a major shift in asset allocations. These decisions will take time and consideration, and ultimately there are few true alternatives to USD assets at the moment.”

It added; “But if there is a continued erosion of some of the institutions which drove US outperformance (i.e. highly open/free markets, skilled immigration, world class higher education), there are risks that sustained high US valuations could continue to converge with the rest of world and bring the USD lower with it.”


The Pound to Euro (GBP/EUR) exchange rate is holding around 1.1870 with markets waiting for UK economic updates this week.

The latest labour-market data will be released on Tuesday.

The Bank of England will be monitoring the wages data closely with expectations that headline annual growth will slow to 5.3% from 5.5% with underlying growth at 5.5%.

A stronger pace of wages growth would effectively rule out a June rate cut while weaker data would trigger some increased speculation that at least some members will vote for a cut.

Consensus forecasts are for a further increase in the unemployment rate to 4.6% from 4.5% which would be the highest reading since the third quarter of 2021.

MUFG commented; “A further increase in the unemployment rate in the week ahead would support our forecast for another 25bps cut in August after hitting a fresh high of 4.5% in March.”

The government is scheduled to release its spending review on Wednesday with details of medium-term departmental limits.

CIBC commented; “Despite the lower than expected government spending UK public finances remain pressured.”

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TAGS: Pound Dollar Forecasts