British Pound to Dollar Forecast: GBP Coils Below 1.32

Modified: Wednesday, 19 November 2025 08:45 BST - Written by David Woodsmith

STORY LINK British Pound to Dollar Forecast: GBP Coils Below 1.32

The Pound-to-Dollar exchange rate (GBP/USD) hovered around 1.3160 on Tuesday, holding a narrow range despite a sharp rise in global market volatility.

With equity markets sliding and safe-haven demand resurfacing, traders are braced for a breakout from the tight band that has contained the pair so far this week.

GBP/USD Forecasts: Poised for a Breakout

Although there has been a wider increase in volatility, the Pound to Dollar rate has been held in relatively narrow ranges and settled little changed around 1.3160.

On a near-term view, UOB commented; “Today, we continue to expect GBP to trade in a range, most likely between 1.3125 and 1.3185.”

Narrow ranges, however, are unlikely to persist given wider market conditions.

ING has a year-end GBP/USD forecast of 1.34.

The Pound has been hurt by a slide in risk appetite with another round of significant FTSE 100 index losses on Tuesday. Weaker risk conditions tend to hurt the Pound and benefit the dollar, but there is uncertainty whether the dollar can benefit this time, especially if the focus is on US tech stocks.

ING commented; “The risk-off environment at the start of the week is prompting a return of safe-haven demand for the dollar. While valuation concerns ahead of tomorrow’s Nvidia earnings release appear to be a key driver of the equity sell-off, the move has been global – not confined to US markets.”

It added; “That’s what matters most for FX: as long as the sell-off is broad-based, the dollar can benefit from safe-haven flows.”

Federal Reserve policy will also be a key element with markets pricing in just under a 50% chance of a Fed rate cut at the December 10th meeting.

Overnight, Fed Governor Waller called for a further cut in December with fellow Governor Jefferson also suggesting he would back a cut, but other committee members will oppose a move.

Traders will be wary over the potential for guidance and labour-market data this week could be pivotal.

Danske Bank commented; “It is relatively rare for a Fed decision to remain a coin flip this close to the meeting; if the data fail to provide sufficient guidance, Powell and other Fed officials may step in with clearer communication to avoid entering the blackout period without a defined market stance.”

It also noted multiple forces on the dollar but added; “Nevertheless, we expect the USD to end the year stronger if the Fed does not cut in December, despite the recent disconnect between front-end yields and the greenback.”

MUFG noted dovish Fed talk and added; “As a result, we are sticking to our call for another Fed cut in December unless evidence emerges of a strong pick-up in labour demand in the month ahead. It remains a key assumption behind our forecasts for a weaker US dollar.”

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TAGS: Pound Dollar Forecasts