Pound to Dollar Forecast: Sterling Buyers Takes Advantage of Risk Recovery

April 10, 2025 - Written by David Woodsmith

STORY LINK Pound to Dollar Forecast: Sterling Buyers Takes Advantage of Risk Recovery

The Pound strengthened to 1.2875 against the US Dollar after President Trump’s U-turn on tariffs triggered a huge wave of relief for risk appetite and equities.

The trade war with China, however, has escalated and there will still be a huge dislocation to the global economy.

Trump inevitably put a positive spin on events, but major fears surrounding US capital markets illustrated the major erosion of confidence.

In this context, relief is liable to be short lived.

The dollar overall has lost ground with EUR/USD trading above 1.10 and according to ING; “The early FX take is that the dollar has been slow to reclaim losses. How it trades on CPI will be instructive.”

The Pound to Dollar (GBP/USD) exchange rate has rallied to around 1.2875.

ING added; “GBP/USD could meet buyers near 1.2800 if our EUR/USD thesis holds today.”


From 15-month lows below 1.1550 on Wednesday, the Pound to Euro (GBP/EUR) exchange rate has rallied strongly to 1.1685, although this is below intra-day highs around 1.1735.

The slide in US bond markets spooked markets on Wednesday and triggered a U-turn from President Trump.

He announced that the reciprocal tariffs which came in on April 9th would be delayed for 90 days for all countries which had not retaliated against the US.

The 10% baseline tariffs would remain in place on all countries.

It appears that the EU will qualify for the 90-day delay as retaliatory tariffs had been announced, but not implemented.

Equities rallied very strongly with a 9.5% surge in the S&P 500 index.

There was, however, a huge sting in the tail as Trump decided to escalate the US-China trade war.


Trump stated that tariffs on China would be increased further to a staggering 125%.

According to the Wall Street Journal (WSJ) a key factor is Xi Jinping’s capacity to engage in a prolonged economic warfare with the US"

According to the WSJ, a central thread is how to inflict hardship on companies that are dependent on ties with China.

This would include export controls of critical materials and regulatory measures.

Given the increase in tariffs on China, the overall level of tariffs into the US economy has declined only slightly and still represents a huge leap from before the Trump administration took office. Overall tariffs are at the highest level since the 1930’s

MUFG commented; “Despite the tariff easing, global trade uncertainty remains very high, given the unpredictability of Trump’s protectionist policies. This will likely continue to weigh on business confidence, putting investments on hold as firms wait for clarity about US trade policies.”

ING is sceptical that the dollar can make much headway and added; “it could come lower again over the coming weeks if it looks like the reciprocal tariff shock has done some damage to hard data in the US consumer and business space.”

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TAGS: Currency Predictions Pound Dollar Forecasts