GBP/USD Price Forecast: Sterling Strengthens Ahead of Central Bank Week

Modified: Monday, 15 September 2025 22:30 BST - Written by David Woodsmith

STORY LINK GBP/USD Price Forecast: Sterling Strengthens Ahead of Central Bank Week

The Pound US Dollar exchange rate (GBP/USD) strengthened at the beginning of the week as markets positioned themselves for the Federal Reserve and Bank of England (BoE) policy announcements.

At the time of writing, GBP/USD was trading at $1.3592, up over 0.2% on the day after briefly reaching its highest level in two months.

The US Dollar (USD) slipped on Monday as traders eased away from the ‘Greenback’ ahead of the Federal Reserve’s closely watched policy meeting this week.

The Fed is widely tipped to restart its rate-cutting cycle on Wednesday after months on hold. Markets are currently pricing in a 94% chance of a 25bps cut, while only a small minority expect a larger half-point move.

These expectations dragged on USD exchange rates at the start of the week. At the same time, improved risk sentiment on the prospect of looser US monetary policy added further pressure to the safe-haven ‘Greenback’.

The Pound (GBP) firmed on Monday, benefitting from the uptick in risk appetite and expectations of policy divergence between the Bank of England and the Federal Reserve.

The BoE is due to deliver its latest policy decision on Thursday. Markets anticipate the central bank will keep interest rates unchanged, while signalling that the likelihood of another cut in 2025 remains slim. This stance gave Sterling an additional lift at the start of the week.

GBP/USD Outlook: UK Jobs Report in Focus

Tuesday marks the first major data release in what promises to be a busy week, with investors eyeing the UK’s latest labour market figures.

Economists expect the unemployment rate to remain unchanged in the three months to July, while wage growth is likely to stay robust. Such results could provide a lift for the Pound. That said, a projected rise in benefit claims and a fall in payrolled employment for August may temper Sterling’s gains by signalling a softening jobs market.

On the US side, retail sales are forecast to slow, which could weigh on the US Dollar. However, any movement may prove limited as traders look ahead to the Federal Reserve’s policy call on Wednesday.

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TAGS: Pound Dollar Forecasts