Pound to Dollar Rises as Sterling Outperforms G10 Currencies

Modified: Monday, 27 October 2025 23:45 BST - Written by Tim Boyer

STORY LINK Pound to Dollar Rises as Sterling Outperforms G10 Currencies

The Pound to US Dollar exchange rate (GBP/USD) edged higher at the start of the week as softer US inflation data fuelled fresh expectations for Federal Reserve rate cuts.

At the time of writing, GBP/USD was trading around $1.3345, up approximately 0.2% from Monday’s opening levels.

The US Dollar (USD) slipped on Monday as investors ramped up bets on near-term monetary easing following Friday’s weaker-than-expected inflation figures.

The latest US consumer price index (CPI) showed that headline inflation cooled more than forecast in September, prompting markets to price in the possibility of a 50-basis point cut by the Federal Reserve before year-end.

The dovish repricing weighed heavily on the ‘Greenback’, while an improvement in global market sentiment — bolstered by reports of progress in US-China trade relations — further dampened demand for the safe-haven currency.

The Pound (GBP), meanwhile, traded steadily through the European session as traders looked ahead to the Confederation of British Industry’s (CBI) distributive trades survey.

The indicator, which tracks retail and wholesale activity, is expected to highlight softer consumer demand in October, potentially limiting Sterling’s upside later in the day.

GBP/USD Forecast: Fed Decision to Set the Tone

Looking ahead, the focus will turn to Wednesday’s highly anticipated Federal Reserve policy decision, which is likely to dictate near-term direction for the Pound to Dollar exchange rate.

Markets are broadly expecting a 25-basis point rate cut, but any larger move or dovish guidance from Chair Jerome Powell could spark further US Dollar losses.

With no significant UK data scheduled for release on Tuesday, Sterling’s direction will remain tied to global risk sentiment — and could extend modest gains if investors maintain their risk-on tone heading into mid-week trade.

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