Pound-to-Dollar Forecast: Sterling Consolidates Below 3-Year Best Conversion

June 18, 2025 - Written by Frank Davies

STORY LINK Pound-to-Dollar Forecast: Sterling Consolidates Below 3-Year Best Conversion

The Pound to Dollar exchange rate (GBP/USD) was unable to secure fresh 40-month highs on Monday and failed to regain the 1.3600 level on Tuesday with consolidation just above 1.3550 as relatively tight ranges prevailed.

According to Scotiabank; “GBPUSD’s trend remains bullish, given its recent push to fresh multi-year highs above 1.36. Bullish momentum is fading somewhat, however the longer-term trend is clearly defined by the sequence of higher lows and higher highs observed following the mid-January bottom.”

It added; “There are no major longer-term resistance levels ahead of 1.3750. The latest range is defined by support below 1.3480 and resistance above 1.3620.”

According to UoB; “there is still a chance for GBP to break clearly above 1.3640 as long as 1.3515 is not breached.”

The dollar overall has struggled to make headway amid a fresh increase in energy prices due to major uncertainty surrounding the Middle East situation, especially with a lack of clarity surrounding the US Administration's policy.

Markets were also reluctant to engage in aggressive positions ahead of Wednesday’s Federal Reserve policy decision, with markets also monitoring G7 meetings.

Scotiabank commented; “If there’s little coherence to the FX moves, the lack of a clear “haven” bid for the USD amid the uncertainty rather underscores the bearish sentiment surrounding it at present.”


The energy complex will continue to be watched very closely.

According to ING; “While a risk premium on crude prices remains warranted for now, investors look minded to gradually scale it back unless they see evidence of serious supply disruptions. The US is attempting to broker some talks between Iran and Israel, and any signs of de-escalation should harm the dollar from here.”

MUFG noted the risk of extended action; “there has been no sign so far from Israel that they are prepared to halt their military operations before doing more to destroy Iran’s nuclear program and ballistic missiles as it also seeks to further weaken the Iranian government’s grip on power.”

Headline US retail sales data was weaker than expected with a 0.9% decline for May compared with consensus forecasts of a 0.5% decline and followed a downwardly-revised 0.1% retreat for April.

There was, however, a 0.4% increase for the control group and there was no dollar selling on the data.

On Monday, US President Trump signed an executive order to update the proposed US-UK trade deal.

There will be an annual quota of 100,000 UK vehicle shipments to the US with a 10% tariff. Tariffs will also be removed on the UK aerospace industry.


Although there are plans to cut steel and aluminium tariffs, there will have to be further negotiations.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders expects UK shipments to the US will resume quickly and added; "We wait to see the full details of the deal and how it will be administered but this will be a huge reassurance to those that work in the sector and bolster the confidence of our important US customers."

There was an element of Sterling position adjustment ahead of Wednesday’s inflation data and Thursday’s Bank of England policy decision.

Scotiabank commented; “Market participants are waiting on Wednesday’s CPI and Thursday’s BoE. Inflation is expected to show a softening trend while still remaining in the mid/lower-3% area on both headline and core.”

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TAGS: Pound Dollar Forecasts