Pound To Dollar Price Forecast: GBP Flat As GDP Boost Meets Energy Risks

The Pound to Dollar (GBP/USD) exchange rate hovered near 1.3567 on Thursday, with Sterling holding firm after stronger-than-expected UK GDP data while the US Dollar stabilised.

DAILY RECAP:

GBP/USD held close to recent highs following the latest UK growth figures.

Data released earlier showed the UK economy expanded by 0.5% in February and over the three months to February, comfortably beating expectations and providing near-term support for Sterling.

Pound Sterling moved higher on the release.

The stronger reading reinforced expectations that the Bank of England may need to maintain a relatively tight policy stance, at least in the near term.

However, the reaction remained measured.

The data largely reflects economic conditions before the escalation in the US–Iran conflict, with markets wary of the potential drag from higher energy costs in the months ahead.

That broader theme continues to dominate.

Earlier in the week, the US Dollar strengthened as geopolitical tensions intensified and oil prices surged, triggering demand for safe-haven assets.

Those gains have since unwound.

Stabilising energy markets and improving sentiment have reduced demand for the Dollar, although the currency has found some support in the latest session as markets consolidate.

In a recent client note, Scotiabank highlighted that recent USD moves reflect shifts in positioning and sentiment rather than a clear change in underlying fundamentals.

Sterling has tracked those developments closely.

The Pound remains supported by the GDP surprise, but gains have been tempered by lingering concerns over the UK outlook, particularly the impact of rising energy costs on growth and inflation expectations.

Near-Term GBP/USD Forecast: Growth Data Meets Energy Risks

For Pound Sterling, the focus will shift to how the strong growth data feeds into inflation and policy expectations.

Markets will also watch for further commentary from Bank of England officials, particularly around the impact of rising energy costs on inflation persistence.

Any signs that inflation risks are building could support the Pound.

For the US Dollar, attention remains on incoming economic data and geopolitical developments.

US inflation and labour market releases will be key in shaping Federal Reserve expectations, while any escalation in the US–Iran conflict could quickly lift oil prices and trigger renewed safe-haven demand.

If geopolitical tensions intensify and oil prices rise again, GBP/USD could move back towards 1.3500.

However, if sentiment continues to improve and US data softens, the pair could retest the 1.3600 level.

In the near-term, Exchange Rates UK Research forecast that the Pound to Dollar exchange rate will trade within the 1.3500–1.3600 range.