Pound Sterling to Dollar Forecast: PMI Boost Meets Risk Headwinds

Modified: Friday, 24 April 2026 10:01 BST - Written by Tim Boyer

STORY LINK Pound Sterling to Dollar Forecast: PMI Boost Meets Risk Headwinds

The Pound to Dollar exchange rate (GBP/USD) has held just above 1.3500, finding support after stronger-than-expected UK PMI data, but gains remain fragile amid persistent geopolitical risks and a firm underlying dollar.

Despite encouraging business activity data, rising cost pressures and ongoing Iran-related uncertainty continue to drive choppy trading, keeping GBP/USD within a tight range.

GBP/USD Forecasts: Held Near 1.35

The Pound to Dollar (GBP/USD) exchange rate found support below 1.35 on Thursday and edged back above this level after stronger than expected UK PMI data.

The dollar maintained a firm underlying tone amid weaker risk conditions which dragged GBP/USD back towards 1.3480.

Scotiabank commented; “We look to a nearterm range bound between 1.3480 and 1.3580.”

There is still a high degree of uncertainty surrounding the Iran situation which is contributing to choppy trading conditions.

President Trump indicated that the US-Iran ceasefire is open-ended at this stage, but the Iran blockade of the Strait of Hormuz and the US blockade of Iranian shipments both remain in place while the outlook for talks remains opaque.

National Australia Bank head of markets research Skye Masters commented; "Despite Trump's ceasefire extension, tensions remain elevated with Iran refusing to reopen Hormuz while U.S. naval blockades persist, raising the risk of prolonged supply disruption."

There is a risk that markets are being complacent. Masters added; “Tail risks are under-priced, and inflation pressures will linger well into year-end.

According to ING; “The current environment still points to strength in USD and commodity currencies, although the latter depends heavily on a continuation of recent equity market resilience.”

The headline UK PMI business confidence data was stronger than expected with the manufacturing and services sectors both above the 50.0 benchmark, but costs and charges both surged.

There are also still significant economic risks and the CBI industrial orders index dipped further to -38 for April from -27 previously.

Business optimism slumped to a net balance of -65%, the weakest reading since April 2020.

CBI Lead Economist Ben Jones commented; “Warning signs are flashing in this survey. Sentiment among UK manufacturers is deteriorating at a speed not seen since the pandemic.”

Central banks continue to face a very difficult trade off given weaker growth and higher inflation.

Amid the surge in costs, markets are now pricing in a 75% chance of a Bank of England rate hike by June.

Scotiabank noted concerns over UK fundamentals; “Market participants are once again expressing concerns about the government’s ability to adhere to Chancellor Reeves’ fiscal buffer, given the recent Gulf tensions and the rise in energy prices.”

There are also still important underlying political stresses with expectations that Prime Minister Starmer will face a challenge after the May 7th elections.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts