Pound to Dollar Forecast

Seasonal factors could help extend a recent recovery in the Pound to Dollar exchange rate say foreign exchange analysts at Société Générale.

New research from Investec finds the "gloom in macro expectations for the UK may be overdone" and they forsee a recovery in the British Pound over coming months as a result.

The Pound to Dollar exchange rate has staged a robust rebound from the depths of its mid-month lows but could struggle for further traction over the coming days as key U.S. economic reports garner the lion’s share of market attention in what will be a quiet period for the UK economic calendar. 

The UK is the "poster child for stagflation" says investment bank JP Morgan as it announces "pretty deep cuts" to their British Pound forecasts.

The Pound to Dollar rate has recovered sharply from two-year lows following a favourable turn in UK economic data and a rebound by a heavily sold Chinese Renminbi, which could potentially lift it further this week and may even prompt a test of technical resistance up near 1.2662 on the charts.

The Dollar should make a decisive turn lower by Autumn says Morgan Stanley, which would allow Pound Sterling and other major currencies to recover.

The Pound to Dollar exchange rate has deepened an almost year-long downtrend but could attempt a corrective rebound this week if an easing of coronavirus-related restrictions in Shanghai is welcomed by global markets.

As a "tide of pessimism" hits the UK, expect further GBP weakness says BNP Paribas.

The Dollar will turn tail and retreat from around mid-year says analysts at Westpac.

The Pound to Dollar exchange rate crumbled further into oversold territory on the charts last week but still risks additional losses that could pull it down to 1.2255 or below in the days ahead as mounting Chinese economic growth risks support the greenback ahead of the latest U.S. inflation report. 

"The narrative is so powerful at the moment it is hard to see sterling recovering much ground" - JP Morgan.

There may now be scope for the Fed to defer this any announcement on QT this Wednesday, which would potentially act as a dampener for U.S. bond yields and perhaps also for the Dollar too.

Analysts at ABN AMRO have said they are slashing their forecasts for the British Pound on the belief the Bank of England is nearly done with rate hikes.

"The regime of softer growth-higher inflation outlook has persisted and remains supportive of USD strength" - JP Morgan.

The Pound to Dollar rate entered the new week testing a major level of support on the charts and with only limited recovery prospects following a lengthy run of losses, while further declines remain a possibility due to an increasingly aggressive Federal Reserve (Fed) monetary policy stance. 

Saxo Bank says the bashing received by Pound Sterling last week leaves it ready to turn tail against the Euro and head lower over coming days.

"The US dollar could be close to peaking" - MUFG.

Western Union Business Solutions says GBP/USD could be poised to make a decisive break below 1.30 this week.

The Pound to Dollar exchange rate remains suppressed and at risk of further lurches below 1.30 over the coming days due to continuing strength of the U.S. Dollar and likely side effects of a possible People’s Bank of China (PBoC) effort to fend off unwanted strength in the Renminbi.

The Pound to Dollar exchange rate could only make a meaningful rebound around the middle of 2022, according to new analysis.