British Pound to Dollar Forecast: GBP Holds 1.30 as Tech Jitters, CPI Shape Outlook

Modified: Thursday, 20 November 2025 09:15 BST - Written by Frank Davies

STORY LINK British Pound to Dollar Forecast: GBP Holds 1.30 as Tech Jitters, CPI Shape Outlook

The Pound to Dollar exchange rate (GBP/USD) struggled for momentum on Wednesday, edging lower to around 1.3120 following the release of the UK’s latest inflation figures.

According to UoB, “a breach of 1.3105 would indicate that GBP is more likely to range-trade rather than head higher to test 1.3240.” Scotiabank also warns that a break below 1.3100 could pave the way for deeper losses. Danske Bank maintains a one-month GBP/USD target of 1.31, rising to 1.33 over six months as the dollar gradually softens.

Domestic developments were influential, although global risk sentiment remained a major driver. Fragile risk appetite, driven by weaker equities, continued to weigh on Sterling, while the US Dollar saw a mixed reaction.

UK inflation slowed in October, with headline CPI easing from 3.8% to 3.6% and core inflation slipping from 3.5% to 3.4% — both in line with expectations. Softer energy base effects helped pull the annual rate lower.

The figures did little to shift market pricing for the Bank of England, with traders maintaining around an 80% probability of a December rate cut. Paul Dales, chief UK economist at Capital Economics, noted: “The fall in CPI inflation… could well prompt the Governor of the Bank of England to put on a red suit and white beard and cut interest rates from 4pc to 3.75pc on December 18.”

US equity markets weakened again on Tuesday, with the Nasdaq falling 1.2%. Investors are now awaiting Nvidia’s latest earnings, due overnight, which could have a significant influence on broader risk sentiment. ING warned of vulnerabilities in tech-heavy markets, commenting: “The understandable fear is that this is a very crowded trade and that a casual walk to the exit could turn into something less orderly should cause be found.”

MUFG added that given the current positive correlation between equities and the dollar, “a bad earnings report this evening could drive the dollar weaker.”

Attention will also turn to Thursday’s delayed US non-farm payrolls report for September. Consensus forecasts point to a 55,000 increase in jobs and an unemployment rate steady at 4.3%.

MUFG emphasised: “The focus will then quickly shift back to the economy and it is the jobs market that will ultimately determine dollar direction into year-end.”

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