GBP/USD Forecast: Pound Sterling Dips on Fears of Prolonged Iran Blockade

Modified: Wednesday, 29 April 2026 19:01 BST - Written by James Fuller

STORY LINK GBP/USD Forecast: Pound Sterling Dips on Fears of Prolonged Iran Blockade

The Pound US Dollar (GBP/USD) exchange rate weakened on Wednesday as concerns mounted over a sustained disruption to energy exports from the Middle East.

At the time of writing, GBP/USD was trading at approximately $1.3496, marking a modest decline from Wednesday's opening levels.

The US Dollar (USD) moved higher during Wednesday’s session, underpinned by reports that US President Donald Trump is planning for an extended naval blockade of Iran.

The news unsettled global markets, with investors increasingly worried about the economic fallout from a prolonged squeeze on energy supplies.

That said, gains in the ‘Greenback’ were tempered by a degree of caution ahead of the Federal Reserve’s upcoming interest rate decision.

Although no immediate changes to policy are anticipated, market participants remain alert to any signals regarding the Fed’s outlook, particularly given the inflationary risks linked to higher oil prices.

The Pound (GBP) struggled to find support on Wednesday as concerns surrounding the UK’s fiscal position resurfaced, driven by renewed volatility in the bond market.

Government borrowing costs climbed sharply, with the 10-year gilt yield holding above 5%, levels not seen since the global financial crisis.

This surge reflects persistent inflation worries and broader unease over the UK’s economic outlook. It also raises questions about the government’s capacity to shield households from elevated energy costs, especially if supply disruptions in the Middle East persist.

Near-Term GBP/USD Forecast: BoE Guidance in Focus

Looking ahead, attention will shift from the Federal Reserve’s policy announcement to the Bank of England’s own interest rate decision on Thursday.

While the BoE is also expected to leave rates unchanged, investors will be closely watching its forward guidance for any shift in tone.

A more cautious stance from policymakers could weigh on Sterling, particularly if it contrasts with earlier signals that fuelled expectations of tighter policy.

Following the BoE’s decision, the release of the latest US GDP figures may provide additional direction, with signs of a solid rebound in growth likely to lend further support to the US Dollar.

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TAGS: Pound Dollar Forecasts