Pound to Dollar Week Ahead Forecast: Below 1.35 Today, Where Next?

July 14, 2025 - Written by David Woodsmith

STORY LINK Pound to Dollar Week Ahead Forecast: Below 1.35 Today, Where Next?

Foreign exchange analysts at Scotiabank forecast that the Pound to Dollar exchange (GBP/USD) will strengthen to 1.40 at the end of the year, with a further advance to 1.48 at the end of next year.

ING expects GBP/USD will be held at 1.35 by the third quarter of 2026 with medium-term Pound vulnerability.

The Pound was unable to make any headway during the week and dipped to 2-week lows just below 1.3500 before attempting to stabilise.

According to Scotiabank; “Political uncertainty has generated headline risk, however the market appears to be a dominant force in maintaining the government’s commitment to fiscal responsibility. We are bullish GBPUSD.”

ING commented on the near-term outlook; “We think the dollar could be due a 2-3% corrective bounce in the third quarter as the Fed continues to resist White House pressure to cut rates.”

Domestically, the latest GDP data was weaker than expected which triggered fresh concerns over the threat of economic under-performance and tax increases.

ING pointed to weak labour-market data last month; “This data may well be revised up, as is fairly common, but if that doesn’t happen – and indeed if June’s data is as bad as May’s – then it would raise difficult questions for both the Bank of England and the Treasury.”


RBC notes the risk of renewed UK-US trade friction; “A trade agreement between the two countries has already been struck in principle, but there are many details that have yet to be solidified, so we won’t be surprised if renewed trade tensions return to haunt the pound.”

Scotiabank considers that fears are overdone; “Markets are clearly concerned about the UK’s fiscal outlook but also clearly have a high degree of confidence in Chancellor Reeves.”

President Trump announced a 50% tariff on Brazilian exports from August 1st and a 35% levy on Canada.

The dollar, however, held firm during the week with no major dislocation from fresh trade tensions.

HSBC commented; “We suspect trade policy may be losing its grip on the USD, which may mean interest rates reassert their influence. If they do, it would come at an interesting time for the Fed. Yesterday’s release of FOMC minutes reflects a lively debate about whether inflation lies in wait because of tariffs, or whether the lack of high tariffs (despite being threatened) means there is no more inflation lurking in the shadows.”

According to the latest Federal Reserve minutes only two committee members backed the potential for a rate cut in July.

Markets have ruled out a move and are pricing in around a 65% chance of a September move.


According to Barclays; “We retain our baseline expectation that the FOMC will deliver a single 25bp cut this year, in December, with the economy slowing, the unemployment rate edging up, and the tariff-related inflation bump showing signs of having peaked.”

The bank did note a high degree of uncertainty; “If the unemployment rate were to jump suddenly by several tenths of a percent, we would expect the FOMC to cut rates more aggressively. Conversely, if the unemployment rate remains relatively low amid rising inflation and elevated inflation expectations, we think the FOMC would be more likely to remain on hold.”

RBC commented; “GBP is unlikely to receive any hedging boost as the Fed cuts rates, particularly as the BoE is likely to be cutting alongside the Fed.”

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Currency Predictions Pound Dollar Forecasts