British Pound to Dollar Forecast: GBP Struggles to Rebound Against Firm USD

Modified: Tuesday, 23 September 2025 23:30 BST - Written by David Woodsmith

STORY LINK British Pound to Dollar Forecast: GBP Struggles to Rebound Against Firm USD

The Pound to US Dollar (GBP/USD) exchange rate was muted on Tuesday as Sterling struggled to gain traction after weaker-than-expected UK PMI data.

At the time of writing, GBP/USD was trading at around $1.3501, virtually unchanged from the start of the session.

The Pound (GBP) slipped in the wake of September’s flash PMIs, which revealed disappointing results across both the manufacturing and services sectors.

The manufacturing index dropped from 47.0 to 46.2, moving deeper into contraction, while the services PMI fell from 54.2 to 51.9, missing forecasts for a softer decline to 53.5.

As the services sector accounts for the bulk of UK economic activity, the sharp slowdown to a four-month low weighed heavily on sentiment.

Analysts pointed to subdued client confidence and lingering political and economic uncertainty as key drags, leaving Sterling struggling for support through the session.

The US Dollar (USD), meanwhile, traded steadily against most major peers. Investors largely held positions ahead of further commentary from the Federal Reserve.

On Monday, new policymaker Stephen Miran had argued that US interest rates remain around 200 basis points too high, putting some mild pressure on the Greenback.

On Tuesday, attention shifted to Fed Chair Jerome Powell’s upcoming speech, with traders bracing for any dovish signals that could spark renewed Dollar selling.

GBP/USD Forecasts: Central Bank Commentary in Focus

Looking ahead to Wednesday, GBP/USD is likely to take direction from a slate of speeches by Federal Reserve and Bank of England officials.

With no major data scheduled, markets will be watching closely for any policy hints that could reshape interest rate expectations on either side of the Atlantic.

Beyond central bank commentary, broader risk appetite may also steer price action.

A shift towards risk-on sentiment could lend the Pound fresh support, while a more cautious market tone would likely see GBP/USD remain under pressure.

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TAGS: Pound Dollar Forecasts