Pound to Dollar Forecast: GBP/USD Vulnerable as BoE Cut Bets Build

Modified: Monday, 3 November 2025 22:30 BST - Written by Tim Boyer

STORY LINK Pound to Dollar Forecast: GBP/USD Vulnerable as BoE Cut Bets Build

The Pound to US Dollar (GBP/USD) exchange rate weakened on Monday amid mixed central bank rhetoric, despite a broadly upbeat tone across global markets.

At the time of writing, GBP/USD was trading around $1.3121, down roughly 0.2% from Monday’s opening levels.

The Pound (GBP) struggled to find direction through the session, as fresh concerns over potential Bank of England (BoE) interest rate cuts continued to weigh on investor sentiment.

Reports from Barclays and Goldman Sachs on Friday suggested that the odds of a rate reduction at this week’s BoE meeting had increased, prompting traders to pare back Sterling exposure ahead of Thursday’s decision.

As one analyst noted, “Markets have begun to price in a clear shift in BoE policy direction — from tightening to easing — and that’s keeping Sterling on the defensive for now.”

The US Dollar (USD), meanwhile, held firm against most major counterparts, supported by lingering hawkish undertones from last week’s Federal Reserve meeting.

Although the Fed delivered a 25 basis-point rate cut, Chair Jerome Powell maintained a cautious tone, pushing back against expectations of an imminent follow-up move in December.

This stance helped to underpin the Greenback through Monday’s session, particularly as investors awaited fresh US data for direction.

Later in the day, the release of the ISM manufacturing PMI was expected to offer further insight into the health of the US economy. A stronger print could reinforce the Dollar’s resilience, extending its early-week gains.

GBP/USD Forecast: Market Sentiment in Focus

Looking ahead to Tuesday, the Pound to US Dollar (GBP/USD) exchange rate is likely to take its cues from overall market sentiment, with little in the way of key economic releases from either side of the Atlantic.

With the UK data calendar quiet, Sterling is expected to remain vulnerable to ongoing speculation surrounding the BoE’s next policy move. Traders are likely to stay cautious ahead of Thursday’s crucial rate decision, limiting the Pound’s recovery potential.

Meanwhile, in the US, the ongoing government shutdown means data visibility remains limited, leaving risk appetite as the primary driver of market direction.

If investors turn more cautious, the Dollar’s safe-haven appeal could see it extend its recent strength, keeping GBP/USD under pressure as the week unfolds.

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TAGS: Pound Dollar Forecasts