Pound to Dollar Forecast

Favourable April seasonality propels the Pound to its strongest valuation against a host of currencies since the start of the year, but momentum indicators look overbought and gains should fade says Bank of America.

The Dollar is finding itself bid in midweek trade amidst a broader turn lower in global equity markets, highlighting the currency's enduring safe-haven appeal.

The Pound to Dollar exchange rate staged a hasty retreat from eleven-month highs ahead of the weekend but could slip further this week if a pending deluge of UK economic data calls into question some of the popular assumptions about the outlook for the Bank of England (BoE) Bank Rate.

BNP Paribas Securities Corp's Head of Americas Macro Strategy, Calvin Tse, has suggested that the US dollar (USD) could be set for a multi-year structural decline due to several factors.

The Pound to Dollar exchange rate has rallied strongly in recent months and could rise further to 1.30 or so before the curtain closes on 2023.

According to a recent report by Deutsche Bank, the market's expectations for the British Pound may have become overly optimistic in recent weeks.

The GBP/USD reached 1.25 handle last week, before dipping back below the high of its prior range around 1.2450. This level is now very important.

The British Pound could experience a setback as the Bank of England will surprise investors by keeping interest rates on hold in early May, according to a leading investment and commercial bank.

GBP/USD recovery disrupted by soft U.S. data, as resistance stymies path above 1.25 on chart.

The Pound to Dollar exchange rate eased from close to one-year highs in the final session of a holiday-shortened week for some markets but the trend on the charts has shifted in favour of further gains and many analysts are tipping new highs for the months ahead. 

The British Pound is a 'buy on dips' as a brighter UK economic outlook combines with a broader Dollar retreat to keep 2023's uptrend in GBP/USD say analysts.

The Pound to Dollar exchange rate rose strongly in March but could climb further to retest the year's highs near 1.25 this week as a fresh rally in oil prices keeps the immediate interest rate risks tilting higher at the Bank of England (BoE) and more so than for the Federal Reserve (Fed).

A move to 1.27 would offer Sterling sellers their greatest purchasing power since April 2022.

Goldman Sachs says it is turning more constructive on the Pound's prospects amidst a broadly improved domestic environment, but it is still too soon to get outright positive.

Capital Economics, the independent economics research provider, maintains a view the Dollar will continue to strengthen over the coming weeks, but it should turn lower from around mid-year.

GBP/USD recovery intact but facing resistance overhead.

The Pound to Dollar exchange rate has remained buoyant near to six-week highs in recent sessions but could edge higher still this week if global markets stabilise ahead of eagerly awaited interest rate decisions from the Federal Reserve (Fed) and Bank of England (BoE).

The Pound to Dollar exchange rate has rebounded sharply from 2023 lows and may rise further in the days ahead but volatility could also be likely later this week as U.S. inflation data and the UK budget bring the 'cost of living' and 'price of not dying' back into focus and perspective on both sides of the Atlantic.

"A more modest 25bp hike on March 23rd could prove some downside risks to GBP/USD - perhaps to the 1.16/18 area" - ING.

The Pound to Dollar exchange rate has remained subdued while the prospect of recovery has appeared to slip further from view in recent trade but Sterling still benefits from a thicket of technical supports located around 1.19 on the charts, which could continue to limit any losses in the days ahead.