GBP to USD Forecast: Pound Sterling Jumps on US-Iran Ceasefire News

Modified: Wednesday, 8 April 2026 18:31 BST - Written by James Fuller

STORY LINK GBP to USD Forecast: Pound Sterling Jumps on US-Iran Ceasefire News

The Pound to US Dollar (GBP/USD) exchange rate surged on Wednesday, climbing to its highest level in a fortnight as markets reacted to news of a ceasefire between the US and Iran.

At the time of writing, GBP/USD was trading near $1.3429, up around 1% from the start of the session.

The US Dollar (USD) came under significant pressure following a major shift in the geopolitical backdrop, with Washington and Tehran agreeing to pause hostilities.

The temporary ceasefire, reportedly lasting two weeks and including the reopening of the Strait of Hormuz, helped ease fears of a prolonged disruption to global energy supplies.

As a result, financial markets rallied, with equities advancing and oil prices retreating as concerns over supply shortages faded.

This improvement in sentiment dented demand for the safe-haven US Dollar, prompting investors to rotate into higher-risk assets.

At the same time, traders remained cautious ahead of the release of the minutes from the Federal Reserve’s March policy meeting later in the day.

The Pound (GBP) delivered a mixed performance. While it posted strong gains against the US Dollar, it struggled to match this momentum against other currencies.

Sterling’s broader performance was weighed down by a shift in expectations for Bank of England policy, with markets reassessing the likely path for interest rates.

Where investors had previously anticipated multiple rate increases in response to rising inflation risks, the easing of geopolitical tensions has led to a scaling back of those expectations, with forecasts now pointing to a more measured approach.

Short-Term GBP/USD Forecast: Inflation Data in Focus

The Pound to US Dollar exchange rate is likely to remain sensitive to both geopolitical developments and incoming US data.

If the ceasefire continues to hold and shipping activity through the Strait of Hormuz normalises, the US Dollar may remain under pressure as risk appetite improves.

However, attention will also turn to the latest US inflation figures.

Evidence of persistent price pressures, or a renewed uptick in inflation, could reinforce expectations of a more hawkish Federal Reserve stance and lend support to the US Dollar.

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TAGS: Pound Dollar Forecasts