GBP/USD Forecast: Bailey Speech to Guide Pound Sterling Direction

Modified: Monday, 13 April 2026 19:01 BST - Written by Frank Davies

STORY LINK GBP/USD Forecast: Bailey Speech to Guide Pound Sterling Direction

The Pound to US Dollar (GBP/USD) exchange rate started the week on the back foot, following a breakdown in negotiations between the US and Iran over the weekend.

At the time of writing, GBP/USD was trading near $1.3425, down approximately 0.3% from Monday’s opening levels.

The US Dollar (USD) advanced, recovering losses from the previous week as geopolitical tensions in the Middle East intensified.

The failure of US-Iran peace talks has dampened hopes for a near-term resolution, fuelling concerns that the conflict could drag on.

Adding to market unease, US President Donald Trump signalled plans to restrict access to Iranian ports via the Strait of Hormuz, raising the prospect of a naval blockade.

This escalation pushed oil prices back above $100 per barrel and prompted a fresh flight to safety, boosting demand for the US Dollar as investors reassessed inflation risks and the global economic outlook.

The Pound (GBP) showed relative resilience against other currencies, supported by reports of closer economic ties with the European Union.

Proposed legislation would allow the UK to more easily adopt new EU regulations, helping to align with single market standards and reduce trade frictions.

Prime Minister Keir Starmer has framed the move as a way to strengthen economic cooperation and support long-term growth, a stance that has been cautiously welcomed by markets despite political opposition.

Short-Term GBP/USD Forecast: Bailey Speech in Focus

Developments in the Middle East are expected to remain the dominant driver of movement in the Pound to US Dollar exchange rate.

As long as geopolitical risks stay elevated, the US Dollar may continue to benefit from safe-haven demand.

Meanwhile, Sterling could take direction from comments by Bank of England Governor Andrew Bailey.

If Bailey adopts a more cautious tone and pushes back against expectations for tighter policy, the Pound may face additional pressure in the near term.

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TAGS: Pound Dollar Forecasts