Pound Sterling to Dollar Forecast: GBP/USD Targeted at 1.37 by End of 2025

Published: Tuesday, 29 July 2025 07:30 BST - Written by Tim Boyer

STORY LINK Pound Sterling to Dollar Forecast: GBP/USD Targeted at 1.37 by End of 2025

The Pound to Dollar exchange rate (GBP/USD) has struggled to hold gains above 1.3450 as a firmer USD, boosted by the latest US-EU trade deal and upcoming Fed policy signals, weighs on near-term sentiment, though long-term forecasts, including from Wells Fargo, still point to a move towards 1.37 by end-2025.

The Pound-to-Dollar rate briefly hit 1.3450 in Asia on Monday before a retreat to test 1.3400 as the US currency gained net support following the US-EU trade deal.

Pound Sterling settled around 1.3430 as it attempted to resist a firm dollar and Sterling did have a firm tone on the crosses with net gains across most major pairs, notably the Euro.

ING sees the risk of further losses for the pair amid a firm US currency; “GBP/USD looks more vulnerable. Here, we favour a retest of decent support at 1.3370, below which losses can accelerate – perhaps all the way to 1.3150 if the US data/FOMC event risk this week is dollar positive enough.

According to UoB; “From here, we expect GBP to trade with a downward bias, but it is too early to determine if GBP can reach the major support at 1.3365.”

Wells Fargo sees scope for GBP/USD gains to 1.37 by the end of 2025 before a relapse to 1.30 by the end of 2026.

Overall risk appetite held firm with overall volatility grinding lower which helped underpin the Pound in global markets.


MUFG commented; “The biggest risk of market volatility that could undermine the positive FX carry momentum will come at the end of the week – with the release of the non-farm payrolls report.”

According to ING; “there is a huge amount of macro data and central bank action this week, which we think can provide some support to the dollar.

The Federal Reserve will announce its interest rate decision on Wednesday with strong expectations that rates will be held at 4.50%.

ING expects a mixture of solid data and residual inflation concerns will influence the decision.

It added; “This should leave the majority of the Federal Reserve comfortable in their patient position on interest rates (FOMC meeting on Wednesday) and see a further pricing out of the prospects of a September Fed rate cut.”

Markets remain very confident that the Fed will leave rates at 4.50%. There is the possibility of dissenting votes from Waller or Bowman and the guidance from Chair Powell will be watched very closely, especially given political pressure from the Administration.

According to Scotiabank; “For the statement, we note the risk of dovish dissents from both members of the board of governors as well as the regional Fed presidents.”


Rabobank commented; “US data release will be overshadowed by an FOMC decision. Has Trump’s visit to the Federal Reserve changed Powell’s mind? Have the recent trade deals – which bring lower tariffs than perhaps feared? And if not, will Powell’s reluctance to back a rate cut change Trump’s mind about letting the Fed Chair sit out his term?

It added; “Our US strategist expects the FOMC to stay on hold a little while longer, as they try to gauge the impact of tariffs on the US economy.”

According to MUFG; “Recent trade deals will be welcomed by the Fed as they help to dampen downside risks to growth and upside risks to inflation. We expect Chair Powell to continue to signal that they want to assess economic data over the summer to better determine the best path for policy going forward while sticking to plans to resume rate cuts later this year if inflation doesn’t surprise to the upside.”

ING also considers that the US Dollar is not an attractive funding currency, limiting potential selling pressure.

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: Pound Dollar Forecasts