Pound-to-Dollar Forecast: Sterling Rally Stalls Ahead of Key US Data

Modified: Wednesday, 1 July 2026 14:21 BST - Written by David Woodsmith

STORY LINK Pound-to-Dollar Forecast: Sterling Rally Stalls Ahead of Key US Data

The Pound to Dollar exchange rate (GBP/USD) surrendered part of its recent recovery after failing to hold above 1.3250, as the Dollar regained some support despite a softer US consumer confidence reading.

While Sterling continues to benefit from easing concerns over the UK's political transition, investors remain reluctant to push the pair higher ahead of key US economic data and further comments from Federal Reserve Chair Kevin Warsh.

GBP/USD Forecasts: Retreat from 1-Week High

The Pound to Dollar (GBP/USD) exchange rate was unable to hold above 1.3250 on Tuesday and retreated to near 1.3210 after the New York open as the Pound was unable to gain further ground.

UoB commented; “To sustain the momentum build-up, GBP must hold above 1.3180.”

Scotiabank is still positive on the outlook; “the pattern of trade suggests the pound should find support on dips to the upper 1.31 area and that gains should pick up momentum above 1.3250/60.”

Domestically, markets remained focussed on the potential Cabinet appointments from Andy Burnham and the outlook for fiscal policy.

The data had little impact with GDP for the first quarter of 2026 confirmed at 0.6%

According to Societe Generale chief FX strategist Kit Juckes; "Sterling's supported by the fact that Andy Burnham was talking about devolution yesterday, that's not a dangerous topic for him to talk about (for markets)."

He added; "The kind of devolution he wants might be expensive so we'll have to see where that goes, but he's done nothing to hurt and so some more sterling bears have been squeezed out."

As far as US data is concerned, the job-openings release was stronger than expected, but consumer confidence fell short of expectations.

According to ING; “USD bullish momentum has clearly faded, and improved risk sentiment argues against another sharp leg higher for now, at least until Fed Chair Kevin Warsh’s Sintra speech tomorrow and Thursday’s jobs data provide clearer direction.”

Fed policy will continue to be watched closely after the Supreme Court ruled on Monday that President Trump did not have the authority to dismiss Fed Governor Cook.

MUFG commented; “The Supreme Court ruling adds to the recent hawkish rhetoric from new Fed Chair Kevin Warsh who emphasized the need to meet the price stability part of the Fed’s dual mandate at his first press conference.”

It added; “Together the developments have helped to dampen investor concerns over threats to the Fed’s independence under President Trump; and have triggered a further reversal of popular US dollar debasement trades from earlier this year.”

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TAGS: Pound Dollar Forecasts