Can GBP/USD Hit Fresh 5-Week Highs? Pound to Dollar Forecast

Modified: Tuesday, 19 August 2025 08:00 BST - Written by David Woodsmith

STORY LINK Can GBP/USD Hit Fresh 5-Week Highs? Pound to Dollar Forecast

Pound Sterling Holds Firm Versus Dollar as Markets Eye BoE and Fed Decisions

The Pound to Dollar exchange rate (GBP/USD) has continued to be held below the 1.3600 resistance area and traded around 1.3550 in European trading on Monday.

According to UoB; “The price movements still appear to be part of a consolidation phase, most likely between 1.3520 and 1.3585.”

It still sees scope for GBP/USD to hit 5-week highs above 1.3620 once the consolidation phase is completed.

ING maintains a positive Pound stance; “Some sticky UK inflation for July looks unlikely to alter the market's view of the BoE over the coming days. This should keep GBP/USD bid this week, where a break of 1.3585/3600 could see 1.3680/3700 by the end of the week.”

Overall volatility levels remain subdued while equity markets globally have held firm which should help underpin the Pound in global markets.

ING pointed to benign risk conditions; “Without much fanfare, Chinese benchmark equity markets are pushing up to the highest levels in a decade as investors seem happy to look through the impact of tariffs and welcome the prospect of stronger domestic demand in the Rest of the World – powered by rate cuts and looser fiscal policy.”


It added; “With risk assets bid and energy prices offered, we expect the dollar to stay under a little pressure as dollar-based investors continue to put money to work.”

One key economic event will be Fed Chair Powell’s speech on Friday at the Jackson Hole economic symposium.

Markets will be expecting hints over the September policy decision.

Traders are now pricing in around a 15% chance that the Fed will not cut rates at the September meeting and Powell’s comments will be crucial for those expectations.

According to ING; “it may be too early for Powell to all but confirm a Fed rate cut in September. Yet when the facts of a 'solid' labour market change, Powell will have to acknowledge it.”

Commonwealth Bank of Australia head of international and sustainable economics Joseph Capurso commented; "Given market pricing is very high for a rate cut in September, I think the risk is that Powell is hawkish, or is perceived to be hawkish, if he gives a balanced view of the U.S. economy."

As far as the UK is concerned, the latest inflation data will be released on Wednesday.


Consensus forecasts are for the headline rate to increase slightly to 3.7% from 3.6% the previous month with the core rate holding at 3.7%.

The data on the services sector will be a key element for expectations surrounding Bank of England (BoE) interest rates.

According to MUFG; “The recent hawkish shift in BoE policy communication has been triggered by concerns over the risk of more persistently higher inflation in the UK.”

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TAGS: Pound Dollar Forecasts