Pound Sterling to Dollar Forecast: GBP Hits 1.36 Ahead of Key US PMI Data

Modified: Friday, 1 May 2026 09:01 BST - Written by Tim Boyer

STORY LINK Pound Sterling to Dollar Forecast: GBP Hits 1.36 Ahead of Key US PMI Data

The Pound to Dollar exchange rate (GBP/USD) has pushed higher to around 1.3600, marking fresh upside momentum as the dollar remains under pressure following the Federal Reserve decision and cautious policy signals.

Markets are now turning their focus to the upcoming US ISM Manufacturing PMI release, with expectations for a modest improvement. The data will be crucial in determining whether GBP/USD can sustain gains above 1.36 or faces renewed dollar support.

GBP/USD Forecasts: Stall Below 1.3550

The Pound to Dollar (GBP/USD) exchange rate found support just above 1.3450 and rallied to above 1.3500 as the dollar failed to hold gains.

GBP/USD failed to hold peak levels, however, as the BoE played down the likelihood of a series of rate hikes.

According to Scotiabank; “The local range is bound between support around 1.3450 and resistance in the upper-1.35s. The longer-term trend from January 2025 is bullish.”

Oil prices surged to 4-year highs late on Wednesday following concerns that the US could engage in renewed attacks against Iran.

ING commented; “All this is raising upside risks for USD, and the end of month-end flows could unlock further upside for the greenback.” It expects GBP/USD to retreat to 1.33.

The BoE Monetary Policy Committee (MPC) held interest rates at 3.75%, in line with market expectations. There was an 8-1 vote for the decision with Pill voting for an increase to 4.00%.

The committee outlined three scenarios for the outlook with very little, limited or substantial second-round effects.

Most members were hopeful that there would be only limited second-round effects, but they did not want to dismiss the potential for much higher inflation which would require a forceful stance.

It warned that a worse-case scenario, inflation could jump to 6.2% by the first quarter of 2027.

The statement added; “Some MPC members "might prefer to act early" to stave off the risk of inflation getting stuck too high while others could prefer waiting for more evidence of that risk crystallising.”

Governor Bailey summarised; “Where we go depends on size and duration of energy shock.”

Following the statement, markets were very close to pricing in three rate hikes by the end of 2026.

Schroders Head Of Global Economics David Rees expressed some scepticism; “With some slack emerging in the labour market and growth likely to weaken if disruption drags on, we doubt the Bank will tighten unless economic activity stays strong enough to absorb it."

The Federal Reserve held interest rates at 3.75% at the latest policy meeting, in line with consensus forecasts.

There was, however, a 8-4 vote for the decision as Miran voted for a cut while three regional Fed Presidents protested against the underlying policy easing bias.

Chair Powell stated that there was no majority for moving to a neutral bias at this time, but risks were increasing.

According to Commerzbank forex strategist Michael Pfister; "Now would be a good time to cut interest rates and Warsh should convince his colleagues on the FOMC to take such action.”

Nevertheless he added; "Yesterday’s dissenters show that this will not be easy, if he even wants to.”

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TAGS: Pound Dollar Forecasts