GBP/USD Forecast: Pound Sterling Slips as Iran Talks Stall

Modified: Tuesday, 28 April 2026 19:01 BST - Written by David Woodsmith

STORY LINK GBP/USD Forecast: Pound Sterling Slips as Iran Talks Stall

The Pound US Dollar (GBP/USD) exchange rate came under pressure on Tuesday, as optimism over a diplomatic breakthrough in the US–Iran conflict faded.

At the time of writing, GBP/USD was trading at roughly $1.3487, slipping by around 0.3% compared with Tuesday's opening levels.

The US Dollar (USD) moved higher on Tuesday, benefiting from a more cautious market backdrop as geopolitical risks re-emerged.

Sentiment soured after reports indicated that US President Donald Trump was unimpressed by Iran’s latest proposal to reopen the Strait of Hormuz, particularly as Tehran remains reluctant to broker talks on its nuclear ambitions.

Despite this, gains in the US Dollar were somewhat restrained, with investors hesitant to take strong positions ahead of the Federal Reserve’s upcoming interest rate announcement.

The Pound (GBP) struggled to gain traction on Tuesday, amid renewed anxiety over the UK’s inflation outlook.

These concerns were fuelled by a sharp rise in global energy prices, with Brent crude climbing to a one-month high and briefly surpassing $110 per barrel.

Although higher inflation could strengthen the case for tighter policy from the Bank of England (BoE), markets remain wary that elevated costs will squeeze household spending and dampen economic momentum.

Short-Term GBP/USD Forecast: Fed Decision in Focus

Looking ahead, attention is expected to shift toward the Federal Reserve’s policy decision, which is likely to act as the main driver of GBP/USD movement midweek.

While no immediate change in rates is anticipated, any indication that borrowing costs will remain elevated for longer could lend support to the US Dollar.

At the same time, Sterling may remain rangebound as traders await the Bank of England’s own announcement on Thursday, with policymakers expected to strike a more measured tone to avoid fuelling further speculation over aggressive tightening.

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TAGS: Pound Dollar Forecasts