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    British Pound GBP Forecasts

    The UK is highly exposed to gas prices and inflation and the pound has been on the back-foot since the Russian invasion of Ukraine.

    Updated: Mar 10, 2023  

    The GBP/USD rate, also known as the “cable” in financial circles, is the exchange rate between the British pound and the US dollar. There are several things that are interesting about this currency pair, including:

    1. Volatility: The GBP/USD is known for its high volatility, meaning that its exchange rate can fluctuate rapidly in a short period of time. This is due to a variety of factors, including economic data releases, political events, and changes in central bank policy.
    2. Importance in international trade: The GBP/USD is one of the most heavily traded currency pairs in the world, and is important in international trade and commerce. Many businesses and individuals need to exchange pounds for dollars, or vice versa, in order to conduct transactions across borders.
    3. Relationship with other currency pairs: The GBP/USD exchange rate is often used as a benchmark for other currency pairs, especially those involving the euro and the yen. Changes in the GBP/USD rate can have a ripple effect across the global financial markets.
    4. Impact of Brexit: The GBP/USD has been heavily influenced by the United Kingdom’s decision to leave the European Union, commonly known as Brexit. The uncertainty surrounding Brexit negotiations, as well as the potential economic impact of the UK’s departure from the EU, have led to significant fluctuations in the GBP/USD exchange rate.

    Pound Sterling Forecasts for 2023

    Despite the UK’s narrowly avoiding a technical recession and the resolution of the Northern Ireland protocol with the “Windsor Framework,” the pound is slightly down after an impressive US Jobs Report boosted the US dollar value. GBP/USD traded in a relatively narrow range throughout most of February, hovering around US$1.20. Q4 2022’s GDP reading came in flat, meaning the UK narrowly dodged a technical recession.

    However, growth for the year is expected to be subdued. The services sector exceeded expectations, hitting 53.3, well into expansionary territory, as well as a strong retail sales number. Recent comments from Bank of England Governor Andrew Bailey seemed to cast further rate hikes from the BoE into doubt, but markets are still expecting another hike on March 23rd. GBP/EUR traded between US$1.1150 and US$1.1420 throughout the month.

    GBP to USD 90-Day Currency Trend Chart with Hi, Low, Up, Down AlertsGBP to USD at 1.2302 is 1.3% above its 3-month average of 1.2148, having fluctuated within a 4.9% range of 1.1826-1.2410 GBP to USD

    The pound hit an all-time low (since decimalization in 1971) in late September 2022 of 1.03 against the greenback (1 USD = 0.97 GBP) — reacting to the controversial tax-cutting policies from the new chancellor.




    What is a good British pound exchange rate?

    Whether the British pound will rise or fall in the future is a difficult question and the answer really depends on many factors. The best way to consider an exchange rate’s relative value is to look at the rate’s history against a range of currencies and in particular against the GBP cross-rate you are interested in.

    GBP to EUR

    GBP to EUR 90-Day Currency Trend Chart with Hi, Low, Up, Down AlertsGBP to EUR at 1.1353 is just above its 3-month average of 1.132, having fluctuated within a 2.7% range of 1.1150-1.1451 GBP to EUR
    The GBP to EUR exchange rate has seen fluctuations within a 2.7% range of 1.1150-1.1451 during the past three months, with the current rate of 1.1371 slightly above the average of 1.132. Several key factors have impacted the market outlook for GBP to EUR in recent times, most notably February's robust US Jobs Report, which has strengthened the US dollar against the major currencies, and growing concerns about inflation and global GDP growth. FX analysts believe that developments in the European and UK economies could bring further changes to the GBP to EUR exchange rate in the coming months. As the Eurozone faces economic uncertainties due to sluggish growth and persistent inflation, the European Central Bank may need to maintain a dovish approach to monetary policy, which might put pressure on the euro. On the other hand, the UK has managed to avoid a technical recession and demonstrated modest growth, but external factors, such as the strong US dollar, may still impact the British pound. Taking these factors into account, the outlook for the GBP to EUR exchange rate in the near future remains cautious. It is essential for individuals and businesses engaging in transactions involving this currency pair to closely monitor exchange rates and make informed decisions based on the market situation.

    GBP to AUD

    GBP to AUD 90-Day Currency Trend Chart with Hi, Low, Up, Down AlertsGBP to AUD at 1.8431 is 3.7% above its 3-month average of 1.7776, having fluctuated within a 7.0% range of 1.7274-1.8475 GBP to AUD
    In recent weeks, GBP to AUD has shown notable strength, reaching a level of 1.8500, which is 4.1% above its 3-month average of 1.7771. This appreciation can be attributed to various factors, including unexpected strength in the US jobs report, sluggish global GDP growth due to ongoing inflation concerns, and China's improving economic outlook after the relaxation of its strict COVID-zero policy. The pair has experienced fluctuations within a 7.1% range, from 1.7274 to 1.8500, over the past three months. The outlook for the GBP to AUD in March appears to be influenced by several key factors. Economists suggest that global risk sentiment, commodity prices, and political developments could all have a significant impact on AUD's value. Additionally, as AUD and NZD often move in correlation due to their geographical proximity and reliance on commodity markets, investors should be closely monitoring their movements as well. The market view is that the GBP to AUD could continue to experience volatility in the upcoming weeks, and investors should remain cautious and vigilant.

    GBP to INR

    GBP to INR 90-Day Currency Trend Chart with Hi, Low, Up, Down AlertsGBP to INR at 101.2 is 1.3% above its 3-month average of 99.86, having fluctuated within a 4.5% range of 97.04-101.4 GBP to INR
    In recent times, the CAD to INR has witnessed fluctuations with the Canadian Dollar trading just below its 3-month average of 60.77 against the Indian Rupee. The currency pair has experienced a 5.1% range within 59.14 to 62.15 during this period. This volatility can be attributed to various key factors such as the unexpectedly strong US Jobs Report, sluggish-global GDP growth amid inflation, and China's relaxation of its strict COVID-zero policy alongside its anticipated economic reopening. FX analysts project a cautious outlook for CAD to INR in the coming weeks due to ongoing market uncertainties, such as global financial market disruption, energy prices affecting India's inflation, and central bank policy expectations. Moreover, interest rate decisions and inflation pressures in both Canada and India are crucial factors that investors should closely monitor. As these driving forces continue to impact investor risk sentiment and foreign exchange markets, it is essential for those looking to make international transactions involving CAD to INR to keep an eye on exchange rates and any potential developments. By staying informed, individuals and businesses can make well-informed decisions to optimize their currency exchange and mitigate potential risks.

    Factors that impact the value of the British pound

    1. Interest rates: Higher interest rates tend to attract more foreign capital, which can increase demand for the pound and lead to appreciation of the currency.

    2. Economic growth: A strong economy can lead to increased demand for the pound, as investors and traders seek to take advantage of the country’s favorable economic conditions.

    3. Inflation: Low and stable inflation can help to support the value of the pound, as it suggests that the central bank is effectively managing the money supply and maintaining price stability.

    4. Government debt: Large government debt can be seen as a burden on the economy and can lead to concerns about the country’s ability to service its debt, which can weigh on the value of the pound.

    5. Political stability: Political stability can help to create a favorable environment for investment, which can increase demand for the pound.

    6. Trade balances: A trade deficit (where a country imports more goods and services than it exports) can lead to a decrease in demand for the pound, as foreign countries have fewer pounds to reinvest in the country. Conversely, a trade surplus can lead to an increase in demand for the pound.

    7. Exchange rate policy: The Bank of England, the central bank of the UK, has a history of actively managing the exchange rate of the pound in order to maintain competitiveness and stability in the foreign exchange market.


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    Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.