Pound to Dollar Week Ahead Forecast: 1.31-1.48 Analyst Ranges

June 30, 2025 - Written by Tim Boyer

STORY LINK Pound to Dollar Week Ahead Forecast: 1.31-1.48 Analyst Ranges

Currency exchange strategists at Wells Fargo forecast that the Pound to Dollar exchange rate (GBP/USD) will retreat to 1.31 by the third quarter of 2026 amid renewed dollar gains.

Scotiabank, however, forecasts that GBP/USD will strengthen to 1.48 by the end of 2026 as the US currency loses further ground.

The dollar secured some support early in the week from the US military strike on Iran’s nuclear facilities. A ceasefire agreement between Israel and Iran, however, lowered tensions substantially.

With stronger risk appetite, gains for equities and a weaker dollar, GBP/USD surged to 44-month highs above 1.3750 before a slight correction.

Following a Wall Street Journal (WSJ) article there has been increased speculation that President Trump will nominate a successor to Fed Chair Powell within the next few weeks.

Trump has repeatedly criticised Powell strongly for his stance on interest rates and any nomination of a replacement would undermine Powell’s position dramatically.

MUFG commented; “Speculation of the Fed easing sooner or ultimately by more had begun to influence rates and FX before the WSJ article and this really is the root of the leg lower for the dollar.”


During the week, previously hawkish FOMC members Waller and Bowman shifted stance.

Both called for a rate cut by July which was seen as a political move to curry favour with Trump. Other members considered that further evidence was needed before making any decision.

Powell’s congressional testimony was little changed, but with some hints of a shift.

MUFG commented; “Powell in testimony spoke of cutting “sooner rather than later” if inflation is contained and the labour market weakens. The response in the US rates market has been to see rates come down more notably in 2026 with the end-2026 fed funds level now back close to 3.00%.”

Markets are also now pricing in at least a 90% chance of a move by September.

According to Scotiabank; “The litany of headwinds for the USD—the White House potentially meddling in Fed policy, near-term risks tilting towards more Fed easing, worries about the impact of US fiscal policy, portfolio outflows because of all of the above, bearish USD technicals, negative USD seasonal trends and (more immediately) chatter of negative month-end USD flows—rather suggest a difficult summer ahead for the USD.”

MUFG added; “Part of the sell-off of the dollar is due to the unpredictability of policy from Washington and that is unlikely to change.”


ING commented; “what are the conditions that can trigger another round of bearish USD dislocation from its short-term drivers? The two most straightforward ones are the tariff and US deficit risks. Both face potential escalation in the next couple of weeks, as Trump is pushing for his One Big Beautiful Bill to be cleared by the Senate by 4 July – potentially reducing the scope for fiscal-rigour adjustments – and the 90-day 'reciprocal' tariff pause expires on 9 July.”

Markets remain confident that there will be an August Bank of England rate cut and comments were broadly consistent with recent rhetoric.

Governor Bailey stated that there was a very high degree of uncertainty which necessitated a cautious stance in cutting interest rates.

MPC external member Greene also backed a cautious stance while pointing out the risk of an unfavourable combination of higher inflation and weaker growth.

Deputy Governor Ramsden maintained concerns that policy is too tight and backed a further rate cut.

The government has conceded ground on welfare benefit changes which will risk triggering fresh anxiety over UK fiscal policy.

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TAGS: Pound Dollar Forecasts