Pound Sterling to Dollar Forecast: Can GBP Build on Burnham Relief Rally?

Modified: Tuesday, 30 June 2026 15:01 BST - Written by David Woodsmith

STORY LINK Pound Sterling to Dollar Forecast: Can GBP Build on Burnham Relief Rally?

The Pound to Dollar exchange rate (GBP/USD) steadied above the 1.3200 level after Andy Burnham's first major speech as Labour leader-designate reassured investors with a commitment to fiscal discipline. However, Sterling's recovery remained limited as the US Dollar continued to benefit from expectations of resilient economic growth and the prospect of higher-for-longer US interest rates.

GBP/USD Forecasts: Above 1.32 After Burnham Speech

The Pound to Dollar (GBP/USD) exchange rate found support below 1.3200 early on Monday and edged higher to 1.3230 just after the New York open.

The dollar held firm in global markets with the currency index near 13-month highs and set for a monthly gain of close to 2.5%. Meanwhile, Burnham’s speech on his vision for government triggered a limited net gain for the Pound.

Scotiabank commented; "Short-term trend dynamics are bullish while longer-term studies remain deeply bearish but are perhaps overcooked. The pound may extend towards 1.3250/75 in the next few days.” Crucial long-term support remains at 1.30.

Domestically, Andy Burnham focussed on the need for devolution in his keynote speech on Monday. There were no details on economic policy, but stated that his policy would be based on sound finances and the discipline of fiscal rules.

There will still be a high degree of uncertainty and, as well as wanting further details, markets are keen to find out who Burnham will appoint as Chancellor.

Caxton strategist David Stritch noted long-term pressures; "Gilt yields' behaviour since the pandemic, raising borrowing costs by nearly double in a handful of years and our continued deficit spending suggest that the last thing needed is a big round of handouts."

He added; "Given what happened last time an ambitious, but unfunded, departure from economic orthodoxy was announced by a UK government, it ended in catastrophe. Burnham would be very wise to avoid the same pitfall."

US Federal Reserve policy will also be a key element with this week’s labour-market data watched very closely.

MUFG commented; “If the Fed is serious about returning inflation to target more quickly, it would really need to deliver a series of rate hikes to restore its inflation‑fighting credibility. A tightening cycle would support a significantly stronger USD, with the dollar index potentially rising by a further 3–5%.”

The bank remains doubtful whether this scenario will play out; “However, we remain unconvinced that the Fed will ultimately pursue such an aggressive policy path. US inflation appears close to peaking and should moderate through the remainder of the year thereby easing pressure on the Fed to respond forcefully.”

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TAGS: Pound Dollar Forecasts