Pound-to-Dollar Forecast: US Yield Surge Dominates Currency Markets

Modified: Wednesday, 24 June 2026 14:56 BST - Written by James Fuller

STORY LINK Pound-to-Dollar Forecast: US Yield Surge Dominates Currency Markets

The Pound to Dollar exchange rate (GBP/USD) remains under pressure near the 1.3200 level as strong US economic data and rising Treasury yields continue to underpin the Dollar.

While Sterling has found support from hopes of a smoother political transition in the UK, investors remain focused on widening US-UK policy divergence and the prospect of further Federal Reserve tightening.

GBP/USD Forecasts: Battle to Hold 1.32

The Pound to Dollar (GBP/USD) exchange rate has again found support near 1.32, but struggled to make headway with a boost to Pound sentiment offset by a generally strong US dollar. The US currency index hit a 12-month high in global markets with the US PMI business confidence data stronger than expected.

Handelsbanken FX strategist Tommy von Bromsen "Right now, the dollar is pricing in higher rates and is gaining on that.”

UoB expects a further phase of range trading; “we continue to expect GBP to range-trade today, most likely between 1.3205 and 1.3275.”

According to Scotiabank; “Short-term price action has revealed support below 1.3200 and near-term resistance appears limited ahead of 1.3350.”

Failure to hold the 1.3160-1.3200 area would increase chatter of a slide to 1.30

US economic trends and UK politics remain the dominant drivers at this stage.

Domestically, nominations for the Labour leadership will open on July 7th with Burnham a strong favourite to win, although there is pressure for there to be a contested ballot.

Potential cabinet appointments will be important. MUFG commented; “Market participants would look favourably upon the appointment of Wes Streeting as the next Chancellor given which could help to reduce the risk of a bigger lurch to the left in fiscal policies.”

It added; “If no alternative leadership candidate emerges in the coming weeks, then Andy Burnham could be confirmed as Prime Minister as early as 17th July. Various media reports have stated that Andy Burnham is expected to give a speech on fiscal policy next week although the exact timing and details haven’t formally been confirmed yet. It will be a key event risk for gilts and the pound.”

US yields will also be important, especially with on-going concerns over inflation trends and potential Fed tightening.

ING commented; “US bond yields have continued to move higher, in dissonance with European rates. It’s a dynamic affecting the whole curve, which clearly underscores expectations of US divergence on growth, inflation and monetary policy – which are underpinning the current strong USD momentum. For now, we continue to see upside risks in the near term for the greenback.”

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TAGS: Pound Dollar Forecasts