Pound to Dollar Forecast: Near-Term Risks Persist Below 1.35, Analysts Say

Modified: Wednesday, 1 October 2025 10:15 BST - Written by Ben Hughes

STORY LINK Pound to Dollar Forecast: Near-Term Risks Persist Below 1.35, Analysts Say

The Pound to Dollar (GBP/USD) exchange rate is holding near 1.3450, but analysts say a break above 1.3500 is needed to ease downside risks.

Standard Chartered sees GBP/USD at 1.37 on a 3–12 month view amid a weaker dollar, while Scotiabank stays neutral below 1.35.

Near term, focus falls on US shutdown risks and jobs data, with MUFG warning this round of political drama could prove more disruptive than usual.

GBP/USD Forecasts: Battling to Extend Recovery

The Pound to Dollar (GBP/USD) exchange rate has edged higher to 1.3450 amid a slightly softer US dollar amid trepidation ahead of key events.

GBP/USD has shown positive signs, but a move to at least 1.3500 will be needed to negate overall downside risks.

Standard Chartered has 3 and 12-month GBP/USD forecasts of 1.37 amid a weaker dollar.

There is the potential for choppy range trading on the last day of the month. The latest US job openings data will also be important while markets will be monitoring US political developments closely with the threat of a government shutdown on Wednesday.

UoB commented; “Based on the current momentum, any further advance is unlikely to threaten the major resistance at 1.3525. On the downside, support levels are at 1.3415 and 1.3395.”

According to Scotiabank; “we remain neutral in the absence of a break back above 1.35.”

As far as US politics is concerned, the immediate focus will be on the risk of a government shutdown with the current funding due to expire today.

A meeting between President Trump and congressional leaders failed to make headway amid deep divisions.

The implications of any shutdown could be more serious than usual given the labour-market impact.

Government workers are usually furloughed during a shutdown, but this time the Administration has pledged to fire workers and not re-hire those that are not considered essential.

There are also a huge number of Federal workers who will officially leave their jobs at the end of September after receiving a six-month redundancy package earlier in the year.

With jobs data watched very closely, any shutdown could also lead to Friday’s scheduled employment report being postponed.

MUFG commented; “As result, market participants are wary that a government shutdown could prove more disruptive this time around depending as well on how long it remains in place.”

According to Brown Brothers Harriman senior markets strategist Elias Haddad; "A prolonged shutdown (more than two weeks), increases the downside risk to growth and raises the likelihood of a more accommodative Fed.”

The latest UK data did not have a major impact with annual GDP growth revised to 1.4% from 1.2% due to historic revisions. There are, however, still expectations of tax increases in November.

Standard Chartered commented on the outlook; “The BOE is likely to enter a protracted pause and the focus will shift to the UK’s Autumn Budget (26 November). The UK’s deficit remains sizable but is likely to improve, easing fears of a fiscal crisis. However, a reliance on tax hikes could weigh on growth and cap GBP gains.”

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts