GBP/USD Exchange Rate Forecast: Can Sterling Hold Above 1.33?

The Pound to US Dollar (GBP/USD) exchange rate remains volatile as traders assess upcoming economic data from both the UK and the US. Currently trading around $1.3269, the pair faces key tests this week that could determine whether it maintains its 1.33 handle.

Key UK Data: Jobs Report & GDP in Focus

UK Employment & Wage Growth (Tuesday)

• The latest UK jobs report will be closely watched, particularly wage growth figures.

• A cooling in earnings growth could reinforce expectations of a Bank of England (BoE) rate cut, weakening Sterling (GBP).

UK GDP Growth (Thursday)

• The first-quarter GDP estimate is forecast to show 0.6% growth, up from 0.1% in Q4 2024.

• A strong reading could boost the Pound, reinforcing optimism around the UK economy.

US Inflation & Retail Sales to Drive USD Trends

US CPI Inflation (Wednesday)

• An expected uptick in US inflation may delay Federal Reserve rate cut bets, supporting the US Dollar (USD).

US Retail Sales & Consumer Sentiment (Friday)

• Slowing retail sales growth and weaker consumer confidence could weigh on the Greenback heading into the weekend.

Last Week’s Recap: BoE Cuts Rates, Fed Holds Steady

• The Pound (GBP) saw swings last week amid BoE and Fed policy decisions.

• The Bank of England cut rates by 25bps, but a hawkish dissent (two policymakers favored no cut) limited GBP losses.

• The Fed held rates, adopting a “wait-and-see” stance on future moves, which strengthened the USD.

• A new UK-US trade deal provided some support for Sterling, but GBP/USD ended flat for the week.

Outlook: Will GBP/USD Hold 1.33?

With UK economic resilience and US inflation trends in focus, the GBP/USD exchange rate could remain volatile. If UK GDP impresses and US data disappoints, the Pound may hold above 1.33. However, softer UK wage growth or stronger USD demand could push the pair lower.

Stay updated with the latest GBP/USD forecasts and market-moving events by following our expert analysis.