GBP/USD Forecast: Pound Gains on Soft Dollar and Risk Relief, Close to 1.32

April 14, 2025 - Written by David Woodsmith

STORY LINK GBP/USD Forecast: Pound Gains on Soft Dollar and Risk Relief, Close to 1.32

The Pound-to-Dollar exchange rate (GBP/USD) is trading within touching distance of the 1.32 handle on Monday.

Risk appetite faltered slightly late in the Asian session on Monday, but the latest Trump concession on tariffs triggered significant overall gains in European equities which supported the Pound.

The dollar was also unable to sustain initial gains with a notable deterioration in underlying sentiment.

The Pound to Dollar (GBP/USD) exchange rate strengthened to 1.3185 and close to 6-month highs above 1.3200 briefly hit on Trump’s initial tariff announcement in the first week of April.

According to UoB; “the outlook for GBP has shifted to positive, and the two technical levels to watch are 1.3210 and 1.3290.”

The Pound to Euro (GBP/EUR) exchange rate rallied to 1.1560 amid FTSE 100 index gains.

A key theme for the week is whether confidence in the US economy and assets can be restored.


Over the weekend, Trump announced that tariffs on several electronic items would be exempted from the 145% tariffs. This would affect items such as smart phones and laptops.

Almost inevitably, there was an important element of confusion and uncertainty with reports that the goods would still be subjected to 20% tariffs.

Trump also suggested that tariffs would be introduced on semi-conductors with a potential announcement this week.

Meanwhile, China has suspended delivery of seven rare earth elements amid the on-going US-China trade war.

Markets remain braced for further U-turns. Nordea commented; “If this week has taught us anything, it is that even Trump will bow to market pressure if things get really turbulent.”

There will still be fears over a negative impact on US economic confidence.

Goldman Sachs commented; “The design and implementation of these tariffs should have a negative impact on the currency because they have contributed to eroding consumer and business confidence.”


It added; “If tariffs weigh on US firms’ profit margins and US consumers’ real incomes, like we think they will, they can erode that exceptionalism and, in turn, crack the central pillar of the strong dollar.”

There are still important wider reservations surrounding US markets.

Danske Bank commented; “With risks of a confidence crisis in USD assets still lingering and several typical market correlations breaking down, the main focus remains on whether easing tariff headlines will be sufficient to stabilise the ongoing sell-off in the USD and Treasuries, as lost credibility may prove difficult to restore.”

George Saravelos, global head of FX research at Deutsche Bank noted an underlying threat; "The market is re-assessing the structural attractiveness of the dollar as the world's global reserve currency and is undergoing a process of rapid de-dollarisation."

He added; "Nowhere is this more evident than the continued and combined collapse in the currency and U.S. bond market."

In this context, US Treasuries will remain a key focus during the week.

According to Nordea; “The rise in US bond rates is worse for Trump than the sharp decline in the stock market. The US’s massive debt needs constant refinancing, and it could be demanding if the US bond market continues such a weakening trend. It is also problematic for the US economy, since higher Treasury risk premiums will increase the borrowing cost for the entire economy.”

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TAGS: Pound Dollar Forecasts