Pound to Dollar Price Forecast: "Push Higher to Low 1.34 Area"

Modified: Wednesday, 6 August 2025 08:00 BST - Written by David Woodsmith

STORY LINK Pound to Dollar Price Forecast: "Push Higher to Low 1.34 Area"

Pound Sterling held a firm tone in global markets with the US ciurrency attempting to stabilise and the Pound to Dollar exchange rate (GBP/USD) settling just below the 1.3300 level.

According to UoB; “Today, GBP could continue to trade in a range, most likely between 1.3260 and 1.3330.”

Scotiabank is now significantly more positive on the GBP/USD outlook; “Friday’s bullish outside range reversal should mark a major low/ reversal for the pound and bring a halt to the July slide. Support is 1.3250/55. Above 1.3355/65 targets a push higher to the low 1.34 area at least.”

The bank notes the potential for Pound support; “the pound is relatively safe from the trade uncertainty that is overshadowing some of its peers still.”

It added; “The BoE policy decision Thursday is the prime focus for UK markets this week, but a 1/4 point cut in the target rate to 4.00% is all but fully priced in.”

The US interest rate debate will remain a key market element in the short term, especially with the potential for President Trump to nominate a new Fed Governor this week.

There is an assumption that the nominee will succeed Chair Powell next May and that the candidate will back a quick cut in interest rates.


Markets are pricing in close to a 90% chance that rates will be cut in September.

Commerzbank commented; “One more vote on the board does not necessarily mean an immediate interest rate cut, as there are a total of seven board members and five regional central bank presidents who are eligible to vote.”

It added; “Nevertheless, with the nomination of a suitably loyal candidate – especially in view of the latest labor market data, see above – the Fed is likely to become more inclined to cut interest rates. Or there could be internal power struggles within the FOMC, which the market would certainly view critically."

According to CIBC; “If prices remain contained and activity data show this isn't just a temporary soft patch, it's possible the doves in the committee could win out over the hawks in the coming months.”

Not all investment banks are convinced at this stage. Berenberg noted that productivity has slowed which will tend to put upward pressure on wages; “The Fed is not yet concerned about wage inflation, but the risks to stable wage growth through year-end are tilted to the upside.”

It added; “We continue to expect that most Fed officials will avoid sending any dovish signals in the near term. In our view, the Fed is likely to keep rates on hold – not just in September, but for the remainder of the year.”

The bank, however, did note downside risks to this forecast.

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TAGS: Pound Dollar Forecasts