GBP/USD Price Forecast: Pound Sterling Pressured Ahead of Fed Meeting Minutes

Modified: Tuesday, 7 October 2025 21:15 BST - Written by Frank Davies

STORY LINK GBP/USD Price Forecast: Pound Sterling Pressured Ahead of Fed Meeting Minutes

The Pound to US Dollar exchange rate (GBP/USD) weakened on Tuesday amid a risk-off market mood.

At the time of writing, GBP/USD was trading at approximately $1.3435, down roughly 0.4% from the start of Tuesday’s session.

The US Dollar (USD) strengthened against several of its major peers during Tuesday’s European session, finding support despite a combination of domestic and policy headwinds.

While the ongoing US government shutdown and rising expectations for Federal Reserve interest rate cuts would typically weigh on the ‘Greenback’, demand for the safe-haven currency was bolstered by deteriorating risk sentiment.

A cautious market mood, fuelled by escalating geopolitical tensions in both Europe and Japan, prompted investors to seek shelter in safer assets.

This allowed the US Dollar to attract support and hold firm across much of the currency market throughout Tuesday’s European trade.

The Pound (GBP) edged lower against most of its major counterparts on Tuesday, as another session lacking in UK economic data left Sterling without a clear directional driver.

With no fresh domestic catalysts to influence movement, GBP exchange rates were largely dictated by shifts in broader market sentiment.

The prevailing risk-off mood in global markets weighed on the increasingly risk-sensitive Pound, leaving it struggling to attract support throughout the session.

As investors favoured safer assets amid the cautious atmosphere, Sterling slipped against a number of its peers, particularly against its traditional safe-haven counterpart.

GBP/USD Forecast: FOMC Meeting Minutes to Drive Movement

Looking ahead to Wednesday’s European session, the GBP/USD exchange rate is expected to take its cues primarily from the publication of the Federal Reserve’s latest FOMC meeting minutes.

With markets currently pricing in a high probability of upcoming interest rate cuts, investors will be closely analysing the minutes for any hints about the Fed’s near-term policy direction.

Should the report strike a dovish tone and reinforce expectations for rate cuts in October and December, the US Dollar could come under renewed pressure in mid-week trade.

Equally, any signs of caution or pushback against market expectations may lend the ‘Greenback’ some support.

Turning to the Pound, the UK’s data calendar remains light, leaving GBP to once again trade largely at the mercy of external factors.

However, a speech from Bank of England (BoE) Chief Economist Huw Pill could inject some volatility into Sterling movement.

If Pill adopts a hawkish stance, this could provide the Pound with a modest boost during Wednesday’s European trading session.

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