British Pound to Dollar Forecast: GBP Fails to Hold 1.36 Break Higher

Modified: Friday, 17 April 2026 08:16 BST - Written by Tim Boyer

STORY LINK British Pound to Dollar Forecast: GBP Fails to Hold 1.36 Break Higher

The Pound to Dollar exchange rate (GBP/USD) has edged lower to near 1.3510 on Friday, retreating from 8-week highs around 1.3600 as the dollar stabilises and momentum in Sterling fades.

Markets appear to have largely priced in optimism over an Iran resolution, while fading Bank of England rate hike expectations and lingering UK economic concerns are limiting further GBP/USD gains.

GBP/USD Forecasts: Edging Back from 8-Week Highs

The Pound to Dollar (GBP/USD) exchange rate hit resistance at 8-week highs close to 1.3600 and retreated to just below 1.3550 as the dollar regained some ground, although it was still close to 6-week lows as defensive demand faded.

Stronger than expected UK GDP data failed to provide significant Pound support amid increased doubts whether the Bank of England (BoE) will increase interest rates.

According to UoB; “While there is still room for GBP to rise, with the tentative slowdown in momentum, any advance is likely part of a range of 1.3545/1.3600.”

Scotiabank commented on the GBP/USD outlook; “Short-term charts are suggestive of near-term resistance in the upper-1.35s and we see limited additional resistance ahead of 1.37 and the late January high in the mid/upper-1.38s.”

ING expects GBP/USD will retreat to 1.33 at year-end amid Pound vulnerability.

Overall risk appetite remained firm on Thursday with renewed gains for equities amid hopes that an Iran-US ceasefire will be extended and that there will be another round of bilateral talks

ANZ head of Asia research Khoon Goh commented; "Markets are now basically looking past the conflict and pricing that there's going to be some kind of settlement.”

He added; "As markets are pricing out the war premium, we could see the dollar coming under further pressure and resuming the downtrend that has been established since basically last year."

ING continued to express some caution over further US selling; “Strong gains in risk assets around the globe are putting pressure on the dollar. We are not big fans of chasing it lower just yet, though. US interest rates are stable rather than falling, and there is little evidence so far of foreigners selling long-term US assets or increasing dollar hedge ratios.”

Earlier, the UK reported 0.5% GDP growth for February compared with expectations of 0.1%, but the data did not alleviate underlying concerns.

Berenberg UK economist Andrew is uneasy over the outlook; “Even before the war, we doubted that the economy could enjoy a sustained acceleration. Flat employment, decelerating pay growth and a rising personal tax burden were set to reduce real household spending power.”

He added; “Now we can add higher energy prices and mortgage interest rates to the list of headwinds.”

The latest comments from BoE expectations have dampened expectations that there will be a near-term rate increase.

Traders are not expecting a rate hike in April and short-term rates markets are now pricing in only around a 50% chance of a June hike. Fading expectations have curbed Pound support in markets.

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TAGS: Pound Dollar Forecasts