Pound to Dollar Forecast: Pound Gains on Dollar as Risk Appetite Improves

April 8, 2025 - Written by Frank Davies

STORY LINK Pound to Dollar Forecast: Pound Gains on Dollar as Risk Appetite Improves

The Pound to Dollar rate ticked higher on Tuesday, buoyed by renewed appetite for risk-sensitive currencies.

At the time of writing, GBP/USD was trading at approximately $1.2770. Pp around 0.3% from Tuesday's opening rate.

The US Dollar (USD) was on the back foot as improving global sentiment prompted traders to rotate out of the safe-haven greenback.

Following a stretch of sharp losses, global equities staged a modest recovery, with gains in Asia feeding into a brighter mood during European trading hours.

Much of this cautious optimism stemmed from growing speculation that Washington may begin easing its stance on trade tariffs, with remarks from US officials indicating potential progress in talks with Japan.

Nevertheless, analysts cautioned that the rebound may be short-lived if substantial trade de-escalation fails to materialise.

Adding further pressure on the US Dollar was intensifying speculation around potential interest rate cuts from the Federal Reserve, as markets begin to factor in the impact of ongoing trade friction on the US economy.


Despite advancing on the back of a weaker USD, the Pound (GBP) found limited momentum elsewhere amid lingering expectations of future Bank of England policy easing.

Sterling was unable to capitalise fully on the improved mood in markets, as investors continued to assess the likelihood of further BoE rate cuts in response to weakening UK economic data and persistent trade concerns.

With the UK economy remaining highly sensitive to global shocks, the Pound’s upside potential was curbed by fears that prolonged tariff disruptions could further weigh on domestic output.

Looking forward, the publication of the latest Federal Reserve meeting minutes may shape the trajectory of GBP/USD in the near term.

While the discussion pre-dates Trump’s latest round of tariffs, investors will be eager to glean insights into the Fed’s mindset and gauge how prepared officials are to respond to slowing US growth.

In the meantime, a lack of major UK data releases could see the Pound move in line with broader market trends, particularly if risk sentiment continues to shift.

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TAGS: Pound Dollar Forecasts