Pound to Dollar Forecast: GBP/USD Crashes to 1.32 as Oil Fears Surge

Modified: Saturday, 14 March 2026 14:31 BST - Written by Ben Hughes

STORY LINK Pound to Dollar Forecast: GBP/USD Crashes to 1.32 as Oil Fears Surge

The Pound to Dollar exchange rate (GBP/USD) remained under pressure into the weekly close, slipping to 1.32248 as renewed energy fears and rising oil prices boosted demand for the US dollar.

Sterling struggled to hold earlier support levels as concerns over Middle East oil supply disruptions intensified, while higher UK bond yields provided only limited relief amid mounting global risk aversion.

GBP/USD Forecasts: Below 1.3400

According to UoB; “A test of 1.3355 will not be surprising, but currently, it does not appear to have sufficient momentum to threaten the major support at 1.3325.”

It did add; “should GBP break and hold below 1.3325, it could trigger the next down-leg.” This would put the focus on support around 1.3250.

Energy prices remain a key focus after fresh concerns overnight surrounding Middle East developments. Equity markets hurt the Pound to some extent, offset by higher yields.

MUFG notes that the dollar’s positive correlation with oil prices has tended to increase. In this context, the dollar has made net gains on Thursday with Brent crude strengthening to near $100 p/b before trading around $96.

The supply of crude from the Middle East remains a key concern, especially with no shipments through the Straits of Hormuz.

MUFG noted the risk of wider disruption; “The evacuation at Mina Al Fahal, which sits outside the Strait of Hormuz, highlights how the conflict is now threatening the few ports from which Middle Eastern oil can still be shipped from while the Strait of Hormuz remains effectively closed.”

The IEA announced the release of 400mn barrels from the strategic reserve which provided only limited relief to oil markets.

MUFG commented; Bloomberg has reported that traders and analysts have estimated that between 2 million and 4 million barrels per day may hit the market this time around. That would still represent only a small proportion of lost daily flow that has been taken off the market considering that around 15-20 million barrels/day normally passed through the Strait of Hormuz. As a result, we are not confident that we have seen the worst of the oil price spike.

In this context, the bank still sees the risk of further short-term dollar gains.

UK monetary policy will also be an important factor for the Pound with markets now pricing in just over a 50% chance of a Bank of England rate hike by year-end.

City Index strategist Fiona Cincotta commented; "The aggressive repricing of BoE rate-cut expectations is providing some support to sterling."

The 10-year yield also increased to near 4.70% and close to 5-month highs. Higher yields remain a double-edged sword for the Pound with potential support offset by the implications for government borrowing.

ING commented on BoE expectations; “Our concern remains that markets have priced out BoE easing too aggressively. The two-year GBP swap rate has jumped 50bp since the Iran conflict started, with now no rate changes expected by year-end.”

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TAGS: Pound Dollar Forecasts