Pound to Dollar Forecast: Risk of GBP/USD Slip to Low 1.33s if 1.3440 Breaks

Modified: Thursday, 25 September 2025 09:00 BST - Written by Frank Davies

STORY LINK Pound to Dollar Forecast: Risk of GBP/USD Slip to Low 1.33s if 1.3440 Breaks

The British Pound fell to two-week lows against the US Dollar on Wednesday, with the GBP to USD exchange rate slipping under 1.3500 as geopolitical tensions weighed on European currencies.

Weak UK manufacturing data added to Sterling’s vulnerability, while analysts warned that a sustained break below 1.3440 could open the door to deeper losses.

Despite pressure, expectations of further Fed rate cuts this year may cap the dollar’s upside.

GBP/USD Forecasts: Sterling Hits 2-Week Lows

The Pound has lost ground on Wednesday with the dollar regaining some ground while European currencies were under some pressure.

The Pound to Dollar exchange rate (GBP/USD) was unable to hold above the 1.3500 level and retreated to 2-week lows after the New York open.

According to UoB; “there is still a chance, albeit not a high one, for GBP to test 1.3430. That said, this has to happen soon, or a break above 1.3565 would indicate that GBP remains in a range-trading phase.”

Piotr Matys, Senior FX Analyst at InTouch Capital Markets commented; "GBP/USD continues to trade near the critical upside trendline at 1.3498, with a daily or weekly close below this level potentially leaving sterling vulnerable against the dollar.”

Scotiabank also senses trouble for the Pound; “A strong technical rejection of last week’s peak above 1.37 casts a bit of a pall over the near-term GBP outlook.”

It added; “Support in the mid-1.34 range has held so far but weakness below 1.3440 trend on a sustained basis may see the pound slip back to the low 1.33s.”

SocGen considers key support is around 1.3300; “Holding above 1.3330 keeps the broader uptrend intact, but a breakdown risks deeper losses toward 1.3130. With resistance capped around 1.3600, traders should watch for a decisive move from the current consolidation.”

European currencies have been hit by unease surrounding geo-political developments amid some shift in stance on Russia from President Trump.

ING commented; “If anything, there are downside risks for the euro and even more for higher-beta European currencies as Trump told EU allies to shoot down Russian planes violating NATO airspace.”

There were further concerns surrounding the UK manufacturing sector with the PMI index dipping to a 5-month low and has been in contraction territory for 11 months.

The UK CBI industrial orders index improved slightly to -27 for September from -33 previously and slightly stronger than consensus forecasts of -30.

Markets will continue to monitor central bank comments, with a primary focus on the Federal Reserve at this stage.

Fed Chair Powell reiterated the high degree of uncertainty surrounding the labour market at the same time as some upward pressure on prices and warned that there were no risk-free policy options.

Markets are still expecting two further Fed rate cuts this year while Treasury Secretary Bessent has continued to push for a substantial cut in rates.

Scotiabank commented; “That will limit the USD’s ability to strengthen significantly, all else equal.”

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TAGS: Pound Dollar Forecasts