GBP/USD surges past $1.30 as dollar weakens: what’s next for sterling
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The British pound has broken through the $1.30 level for the first time since early November, wiping out all post-election gains of the U.S. dollar. This move marks a significant reversal from the multi-month lows seen earlier this year when GBP/USD fell below $1.21. The shift in sentiment is driven by a weakening dollar amid rising U.S. trade tensions and shifting interest rate expectations in both the UK and the U.S.
Sterling’s strength comes ahead of two major central bank meetings this week. The Bank of England is widely expected to keep its benchmark interest rate at 4.50%, maintaining a cautious approach as it navigates inflation risks and economic growth concerns. Similarly, the Federal Reserve is projected to hold rates steady, with market participants closely watching for any policy guidance on future rate cuts. The dollar has faced increasing pressure due to concerns over potential economic slowdown triggered by escalating trade disputes under the Trump administration. The uncertainty surrounding tariffs, along with mixed economic data, has weighed on investor confidence, pushing funds into alternative currencies such as sterling.
From a technical perspective, GBP/USD now faces key resistance at $1.3050, a level that coincides with previous highs in early November. A sustained break above this threshold could open the door to further gains, with the next major resistance at $1.3422—last seen in September. However, failure to maintain momentum could see the pair retest support near $1.2850, where buyers may look to re-enter.
With heightened volatility expected around the Fed and BoE meetings, traders should be prepared for rapid price swings. A dovish stance from the Fed could further weaken the dollar, reinforcing sterling’s upside. Conversely, any unexpectedly hawkish tone from BoE policymakers could extend GBP gains, solidifying its position above $1.30. The forex market remains in a pivotal moment, with trade policy, central bank decisions, and global risk sentiment all playing key roles in determining the pound’s next move.
Sterling’s strength comes ahead of two major central bank meetings this week. The Bank of England is widely expected to keep its benchmark interest rate at 4.50%, maintaining a cautious approach as it navigates inflation risks and economic growth concerns. Similarly, the Federal Reserve is projected to hold rates steady, with market participants closely watching for any policy guidance on future rate cuts. The dollar has faced increasing pressure due to concerns over potential economic slowdown triggered by escalating trade disputes under the Trump administration. The uncertainty surrounding tariffs, along with mixed economic data, has weighed on investor confidence, pushing funds into alternative currencies such as sterling.
From a technical perspective, GBP/USD now faces key resistance at $1.3050, a level that coincides with previous highs in early November. A sustained break above this threshold could open the door to further gains, with the next major resistance at $1.3422—last seen in September. However, failure to maintain momentum could see the pair retest support near $1.2850, where buyers may look to re-enter.
With heightened volatility expected around the Fed and BoE meetings, traders should be prepared for rapid price swings. A dovish stance from the Fed could further weaken the dollar, reinforcing sterling’s upside. Conversely, any unexpectedly hawkish tone from BoE policymakers could extend GBP gains, solidifying its position above $1.30. The forex market remains in a pivotal moment, with trade policy, central bank decisions, and global risk sentiment all playing key roles in determining the pound’s next move.