Pound to Dollar Forecast: GBP/USD Unable to Break Resistance Levels

Published: Sunday, 17 August 2025 13:00 BST - Written by Tim Boyer

STORY LINK Pound to Dollar Forecast: GBP/USD Unable to Break Resistance Levels

The Pound to Dollar exchange rate (GBP/USD) found support above 1.35 on Thursday and advanced to 1.3565 after Friday’s New York open as the dollar failed to hold Thursday’s gains.

There was a limited retreat for the FTSE 100 index, although overall risk appetite held firm while volatility levels remain contained.

The Pound will tend to perform well if risk appetite holds firm.

UBS commented; “For the time being, we think the GBP can outperform against peers on a total return basis thanks to its attractive carry proposition.

UoB expects narrow ranges will prevail; “Outlook for GBP remains positive, and it may rise to 1.3620; the chances of it reaching 1.3660 this time around are more limited.”

According to Scotiabank; “Sterling is firmer on the session but yesterday’s peak and minor reversal from the 1.3595 area warrants attention as the pound topped out at a similar point in late July.

It added; “Cable has put together a solid run of gains since basing in early August but spot needs to push on through to a 1.36 handle to extend gains.”


Scotiabank added; “The pound is lagging some of its G10 peers somewhat this morning but has had a solid week overall, rising against the USD and EUR, as markets rethink the outlook for UK monetary policy after last week’s BoE decision.”

The latest UK inflation data will be released next week and will be significant for near-term Bank of England policy expectations.

Berenberg now has a more positive outlook on the UK economy and does not expect further Bank of England rate cuts, potentially underpinning the Pound.

According to the bank; “Forward looking measures of real interest rates are below pre-financial crisis. Assuming that the neutral real interest rate has rebounded from its 2010s nadir, monetary policy may not be overly restrictive now. Indeed, rising company and household inflation expectations were one reason why the BoE became more hawkish last week. We expect the central bank to pause its cutting cycle with bank rate at 4.00% until 2026.”

Federal Reserve policy will remain a key market influence. Markets remain convinced that the Fed will cut rates in September, but expectations of a 50 basis-point cut have dipped sharply following recent firm data.

Thursday’s US producer prices data was stronger than expected and indicated that there would be more serious upward pressure on consumer prices over the next few months.

US retail sales increased 0.5% for July, marginally below consensus forecasts of a 0.6% advance with a 0.3% increase in core sales.


The New York Empire manufacturing index improved further to 11.9 for August from 5.5 the previous month and well above market expectations of -1.0.

There were weaker readings for employment while inflation pressures increased slightly.

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TAGS: Currency Predictions Pound Dollar Forecasts