Pound to Dollar Forecast: Investment Bank Sees 1.3320-1.3420 Range

Modified: Sunday, 28 September 2025 19:45 BST - Written by Tim Boyer

STORY LINK Pound to Dollar Forecast: Investment Bank Sees 1.3320-1.3420 Range

The Pound to Dollar (GBP/USD) exchange rate remains under pressure as UK budget concerns weigh on Sterling and fiscal risks dominate investor sentiment.

Analysts caution that only a move above 1.3445 would ease downside pressure, while SocGen warns of potential losses towards 1.3130 if support fails.

Scotiabank, meanwhile, sees near-term trading contained within a 1.3320–1.3420 range.

GBP/USD Forecasts: Attempts to Recover from 7-Week Lows

The Pound to Dollar (GBP/USD) exchange rate dipped to7-week lows just below 1.3330 on Friday before a recovery to 1.3380 as the dollar surrendered gains.

A further significant recovery will be needed to signal a more positive outlook.

SocGen commented on the technical outlook; “If GBP/USD fails to hold above 1.3330, an extended decline may unfold, with the next objectives at the 200-day moving average around 1.3130. The August high of 1.3600 is likely to cap short-term upside.”

According to UoB; “Overall, only a breach of 1.3445 would indicate that downward pressure that started late last week has eased.

Scotiabank commented; “The 50 day MA (1.3468) has been clearly broken, and the GBP is threatening a break of the early September low just above 1.33. We look to a near-term range bound between 1.3320 and 1.3420.”

Equity markets also made significant gains on the day which helped underpin Sterling in global markets.

Overall Pound confidence remained weak, however, amid on-going fiscal concerns.

The 10-year bond yield was trading around 4.75% and slightly below opening levels while the 30-year yield settled around 5.56%.

There were still concerns over negative feedback from higher yields which will undermine growth and increase debt-servicing costs.

According to Scotiabank; “fiscal concerns remain elevated as markets eye the softening of demand for gilts.”

Monex strategist Nick Rees commented; "If you've set out fiscal rules and use them as a target rather than a hard limit to be avoided, then fiscal policy is not going to be dictated by the Treasury, it's going be dictated by bond markets."

He added; "It's going to lead to instability and uncertainty, and it's not sterling positive."

Scotiabank noted some fundamental dollar relief; “If the mid-week rise in the USD was a bit of mystery, yesterday’s additional gains at least had the backing of firmer than expected US data. The data helped boost USD-supportive spreads and pare expectations around Fed easing risks over the balance of the year.

It added; “A dose of geo-political worries added some further support to the USD at the margin.”

As far as Friday’s US data is concerned, the PCE prices index increased 0.3% for August with the year-on-year increase at 2.7% from 2.6% previously.

Core prices increased 0.2% with the annual increase holding at 2.9%. All metrics were in line with market expectations.

Next week, the focus is likely to return to US labour-market developments.

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TAGS: Pound Dollar Forecasts