Pound Sterling Rises Against US Dollar on Fresh Buying Interest

Modified: Monday, 22 September 2025 23:30 BST - Written by Frank Davies

STORY LINK Pound Sterling Rises Against US Dollar on Fresh Buying Interest

The Pound US Dollar (GBP/USD) exchange rate climbed on Monday as investors stepped back in to buy Sterling after last week’s sharp declines.

At the time of writing, GBP/USD was trading at $1.3492, up more than 0.2% from its overnight trough.

The Pound (GBP) found renewed support at the start of the week, with traders attracted by oversold conditions.

Sterling had come under pressure late last week after the Bank of England hinted at further interest rate cuts and government borrowing climbed sharply in the run-up to the autumn budget.

As those headwinds eased, the Pound staged a partial recovery on Monday.

Sentiment was also underpinned by weekend news that the government had approved a second runway at Gatwick Airport, a move expected to generate new jobs and support long-term growth prospects.

The US Dollar (USD), meanwhile, slipped in early European trade as profit-taking set in.

After touching a two-week high against the Pound in Asian trading, investors opted to lock in gains from the Dollar’s late-week rebound, leaving the currency softer at the start of the session.

GBP/USD Forecasts: PMI Data to Shape Direction

Looking ahead, Tuesday’s flash PMI surveys will set the tone for GBP/USD.

The UK services PMI is forecast to ease from recent highs, a slowdown that could limit Sterling’s upside if concerns about the resilience of the economy resurface.

In the US, S&P Global PMIs are also due. While they typically attract less attention than the ISM reports, signs of weaker business activity could weigh on the Dollar.

In addition, markets will closely watch remarks from Bank of England Chief Economist Huw Pill and Federal Reserve Chair Jerome Powell.

Any hawkish rhetoric could reinforce expectations of further tightening and keep GBP/USD trading within a narrow range.

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TAGS: Pound Dollar Forecasts