GBP/USD Forecast: US Dollar Softens as Oil Supply Fears Ease

Modified: Monday, 16 March 2026 21:16 BST - Written by Frank Davies

STORY LINK GBP/USD Forecast: US Dollar Softens as Oil Supply Fears Ease

The Pound to US Dollar (GBP/USD) exchange rate opened the week on firmer footing as markets responded to signs that the disruption to shipping in the Strait of Hormuz could soon be addressed.

At the time of writing, GBP/USD was trading close to $1.3269, up around 0.4% from Monday’s opening level.

The US Dollar slipped slightly as investor sentiment improved following reports that an international naval coalition may be assembled to protect commercial vessels travelling through the Strait of Hormuz.

According to the reports, the United States is leading discussions with allied nations about deploying naval forces to escort oil tankers and cargo ships through the key shipping route, which has been heavily affected by the ongoing conflict in the Middle East.

Recent attacks and threats to maritime traffic have sparked fears that energy exports from the Gulf could face prolonged disruption, contributing to volatility in global markets.

However, the prospect of coordinated naval patrols has helped calm some of those concerns, reducing demand for traditional safe-haven assets such as the US Dollar.

Although the Pound managed to gain ground against the US Dollar, it struggled to replicate this performance against several other major currencies due to lingering worries about the UK’s economic outlook.

These concerns intensified after the release of the latest UK GDP figures late last week. Data published by the Office for National Statistics showed the economy unexpectedly flatlined in January, despite expectations for modest growth of around 0.2%.

What particularly unsettled Sterling investors was the timing of the slowdown, which occurred before the recent surge in global energy prices. This has raised fears that the UK economy could face additional pressure in the months ahead as higher costs filter through.

Short-Term GBP/USD Forecast: Central Bank Signals in Focus

Alongside developments in the Middle East, attention will shift toward monetary policy signals as markets prepare for upcoming interest rate decisions from the Federal Reserve and the Bank of England.

While neither central bank is widely expected to alter interest rates at this week’s meetings, investors will be closely analysing their statements for clues about how policymakers are responding to the inflation risks created by rising energy prices.

If either the Federal Reserve or the Bank of England suggests that tighter policy may still be necessary to contain inflation, it could provide support for their respective currencies.

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TAGS: Pound Dollar Forecasts