GBP/USD Forecast: Pound Sterling Test of 1.2990 Best "is Developing"

March 17, 2025 - Written by David Woodsmith

STORY LINK GBP/USD Forecast: Pound Sterling Test of 1.2990 Best "is Developing"

Pound Sterling (GBP) was rangebound versus the US Dollar (USD) on Monday despite the release of some underwhelming US retail sales data.

At the time of writing, the Pound US Dollar exchange rate was trading at approximately $1.2971, virtually unchanged from the start of Monday’s session.

On Monday, the US Dollar (USD) faced difficulties in attracting investor interest and slumped against most of its major counterparts following the release of the latest US retail sales index.

The report showed a lower-than-expected increase in February, rising from -1.2% to 0.2%, falling short of the expected 0.6% gain.

Amid ongoing concerns about the overall health of the US economy, Monday's disappointing data further weakened the 'Greenback' at the beginning of the week.

Additionally, a positive market mood reduced the appeal of the safe-haven currency, exacerbating the US Dollar's decline.

On Monday, the Pound (GBP) experienced fluctuations against most of its major trading partners as a lack of UK economic data at the start of the week left Sterling without a clear direction.

Investors were also likely cautious about making significant moves on the Pound ahead the release of important economic data later in the week.

On Thursday, the UK is scheduled to release its latest employment figures, and the Bank of England (BoE) will announce its latest interest rate decision.

As these key data points approach, GBP exchange rates will likely continue to fluctuate.

Looking ahead, the main driver for the Pound US Dollar exchange rate on Tuesday will likely be market sentiment, given the absence of economic data from both the UK and the US.

If the positive market mood from Monday carries over into Tuesday's European session, then the GBP/USD exchange rate could strengthen.

However, if markets become more cautious, the GBP/USD exchange rate could face downward pressure.

GBP/USD Exchange Rate Forecast: Higher Ahead?

According to FX strategists at Scotiabank, GBPUSD's short-term technicals remain bullish.

"Sterling has been carving out a running consolidation just below the 1.30 level over the past week.

"The pound’s push higher so far today suggests a retest of last week’s 1.2990 high is developing ahead of a push on to the “real” top of the range at the moment at 1.3035.

Support is 1.2925/30."

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TAGS: Pound Dollar Forecasts