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Pound could "trade at 1.15 or lower against the greenback"

ended 13. January 2025

One Forex expert has said the Pound could trade at 1.15 or lower against the Dollar following last Friday's strong non-farm payrolls jobs report, Trump's fast-approaching inauguration and amid the UK bond market sell-off. Another added that there is no “obvious catalyst of a quick rebound on exchange rates for the time being”. Views below.

5 responses from the Newspage community

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Tony Redondo
Founder at Cosmos Currency Exchange
The Pound has already fallen by over 2.5% against the Euro and by nearly 5% against the Dollar since Christmas. Further falls are expected across the board. They are expected to be more muted against the Euro given the stagflation fears that hover over the eurozone economy and the political paralysis in its two leading economies, Germany and France. Against the Dollar, the Pound could continue to freefall. Last Friday’s stellar employment data only adds to the idea gripping the markets that the Federal Reserve will move slowly in cutting interest rates in the US in 2025 in an economy that continues to outperform. Add in the fact that Trump’s inauguration is now just over one week away and the negative economic effect his tariff plans could have on both the UK and eurozone economies could see the Pound trade at 1.15 or lower against the greenback.
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Prem Raja
Head of Trading Floor at Currencies 4 You
Sterling exchange rates have continued to fall following last week's weakness due to the UK bond market sell-offs. The reality of this situation is that it will not be an easy fix for the UK Treasury, and therefore there is no obvious catalyst of a quick rebound in exchange rates for the time being. This is especially the case against the Dollar where Trump's inauguration may spur further USD strength in the coming months. So far I am targeting a fall to 1.20 for GBPUSD and then potentially 1.18, and 1.17 on GBPEUR.
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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
The pound is sinking faster than the Prime Minister’s approval ratings, and Rachel Reeves is standing by with a bucket labeled “Fiscal Responsibility” that’s full of holes. UK gilt yields are skyrocketing, at 4.85% on the 10-year, the highest since 2008—exposing the government’s fiscal house of cards. Borrowing is spiraling, inflation remains stubbornly high, and Reeves seems clueless about how to stabilise the ship. Materials imported from Europe are now eye-wateringly expensive, foreign investors are fleeing, and confidence in the UK economy is crumbling faster than a poorly laid foundation. Reeves promised stability but has delivered chaos. If this is Labour’s vision for Britain, we’re heading straight for economic ruin, and no amount of spin can plaster over these cracks. The pound’s freefall is just the start.
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Faisal Sheikh
Managing Director at Monmouth Capital
There's a silver lining in the fall of the Pound for most UK-based investors with diversified portfolios: your overseas equities, typically priced in Dollars or Euros, will be worth more in Pounds. Since the 2008/09 financial crisis, with the occasional reversal, this has been a modest tailwind if your base currency is sterling. The outlook seems bleak so perhaps the Pound will continue to weaken in the years ahead, but currencies are notoriously difficult to forecast.
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Graham Cox
Director at Bridging Hub
It was only a couple of months ago that Sterling was strengthening against both the dollar and euro, so its current weakness is surprising. 30-year gilt yields are at a 27-year high, which is an astonishing turnaround. But the UK is not alone, as France, Germany and Italy are also seeing their debt costs rise today. The common denominator is President-Elect Trump and his threat to impose tarriffs on goods imported into the US, including those from the UK. So much for the special relationship.