Pound Sterling to Dollar Forecast: GBP Stalls Ahead of Jackson Hole

Modified: Thursday, 27 August 2026 16:06 BST - Written by Frank Davies

STORY LINK Pound Sterling to Dollar Forecast: GBP Stalls Ahead of Jackson Hole

The Pound to Dollar exchange rate (GBP/USD) has slipped back towards 1.3600 after once again failing to break resistance around 1.3650.

The GB Pound remains supported by benign global conditions and relatively attractive UK yields, but markets are becoming increasingly cautious about chasing the Pound higher ahead of Federal Reserve Chair Kevin Warsh's Jackson Hole appearance.

GBP/USD Forecasts: Retreats to Near 1.3600

The Pound to Dollar (GBP/USD) exchange rate was again unable to break the 1.3650 area on Wednesday and retreated to near 1.3600 just after the US open.

According to UoB; “if GBP breaks below 1.3605 it will mean that 1.3700 is out of reach.

Standard Chartered considers positive Pound sentiment has been priced in; “A restrictive BoE stance and continued USD weakness are expected to support the GBP in the near term. However, the move above 1.36 appears stretched.”

Overall market conditions were still broadly benign on the day with the main focus a further decline in energy prices.

The US 10-year yield retreated to just below 4.65%. ING commented; “Lower yields have seen interest volatility dip again and feed into lower volatility in FX and equities.”

The bank expects these conditions will also tend to curb underlying dollar support. Standard Chartered commented on the near-term outlook; “The desire to get U.S. rates lower may present another headwind to the dollar and encourage more appetite for carry trades.”

Markets remain sensitive to energy prices, although US developments will probably dominate in the short term.

Monex Europe commented; "There is no UK data of note today once again with Friday's Jackson Hole keynote still the next probable directional catalyst."

According to updated data, US GDP increased at an annualised rate of 1.5% for the second quarter, unchanged from the first estimate. The GDP prices index increased 6.4% from the flash estimate of 6.2%.

Markets continue to price in around a 40% chance of a rate hike at the September policy meeting.

MUFG commented; “Jackson Hole remains important from a Fed perspective. If there is no strong steer by Warsh on a hike in September (which seems likely) we would likely see front-end rates soften a little in the US.”

DBS Bank added; “Warsh faces a difficult balancing act: defending the Fed’s independence and price-stability mandate while providing greater clarity on the Fed’s reaction function without abandoning his preference for less forward guidance.”

Over the medium term, Standard Chartered is not convinced that the Pound will remain supported; “Domestic support for the GBP is less convincing. The UK unemployment rate has risen to 4.9%, job vacancies have fallen to their lowest since 2021 and private-sector wage growth has slowed to 2.8% y/y, its weakest since 2020. Meanwhile, UK headline inflation rose from 2.6% y/y to 2.9% y/y in July, largely due to higher household energy costs.”

It added; “This leaves the BoE facing weaker growth and externally driven inflation.”

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TAGS: Pound Dollar Forecasts