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Pound hits highest point against the Dollar since 2021: "Now is an excellent time to buy"

ended 28. January 2026

THE Pound is now worth $1.38 against the US Dollar, the highest since October 2021, as experts said "now is an excellent time to buy".

Experts said it is due to a combination of Winter Storm Fern, expectations of lower US interest rates later this year, Donald Trump causing geopolitical uncertainty and the price of gold and silver being high.

Winter Storm Fern could shave up to 1.5% off US quarter one Gross Domestic Product (GDP) growth.

Heavy snow and ice hit across the United States over the weekend, leaving nearly 600,000 homes without power and leading to thousands of flight cancellations.

Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, said now is the time to buy your Dollars.

He continued: "The Pound’s climb to $1.38, its highest level since 2021, is driven by a ‘perfect storm’ of US Dollar weakness and UK interest rate expectations. Investors are moving away from the Greenback due to concerns over US trade tariffs and Federal Reserve independence. 

"Meanwhile, persistent UK inflation suggests the Bank of England will keep rates higher for longer, attracting global capital. While some analysts eye a push toward $1.40, the rally may be nearing its peak as traders begin ‘profit-taking’ ahead of the Spring that will see the ‘Super Thursday’ council, Scottish and Welsh Parliament elections that could herald big changes at the top of British politics. 

"If you need Dollars for a trip or business, now is an excellent time to buy. At $1.38, you are getting nearly 11% more value than at this time last year. Timing the absolute market peak is nearly impossible, a ‘buy now’ strategy locks in a four-year high."

Prem Raja, Head of Trading Floor at Currencies 4 You, said it's more about the Dollar's weakness than the Pound's strength.

He added: "Sterling’s move to 1.38 against the Dollar, its highest level since October 2021, is being driven far more by US Dollar weakness than outright Pound strength. Markets are increasingly pricing in lower US interest rates later this year, which reduces the Dollar’s yield appeal and encourages investors to rotate out of USD exposure. 

"That pressure has been reinforced by political uncertainty, including renewed talk of tariffs, the risk of a government shutdown, and President Trump’s comments last night signalling little concern about a weaker Dollar. Together, this has given markets a green light to sell the Dollar. 

"In terms of how far GBP/USD can go, 1.40 is the obvious psychological level and could be tested if the current narrative persists, but 1.38 is already a multi-year high and a very significant level historically. Short-term pullbacks would not be unusual after a move of this size. For those needing to buy Dollars, these levels represent a very favourable window."

Riz Malik, Director at Southend-on-Sea-based R3 Wealth, said he would not be surprised if it was “by design”.

He added: “The Dollar is supposed to represent stability but the US is anything but stable at present. However, a weak Dollar can help with exports so this could be by design." 


 

3 responses from the Newspage community

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Editor
Riz Malik
Independent Financial Adviser at R3 Wealth
The dollar is supposed to represent stability but the US is anything but stable at present. However, a weak dollar can help with exports so this could be by design.
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Editor
Tony Redondo
Founder at Cosmos Currency Exchange
The Pound’s climb to $1.38, its highest level since 2021, is driven by a "perfect storm" of US Dollar weakness and UK interest rate expectations. Investors are moving away from the Greenback due to concerns over US trade tariffs and Federal Reserve independence. Meanwhile, persistent UK inflation suggests the Bank of England will keep rates higher for longer, attracting global capital. While some analysts eye a push toward $1.40, the rally may be nearing its peak as traders begin "profit-taking" ahead of the Spring that will see the “Super Thursday” council, Scottish and Welsh Parliament elections that could herald big changes at the top of British politics. If you need Dollars for a trip or business, now is an excellent time to buy. At $1.38, you are getting nearly 11% more value than at this time last year. Timing the absolute market peak is nearly impossible, a "buy now" strategy locks in a four-year high.
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Premium
Prem Raja
Head of Trading Floor at Currencies 4 You
Sterling’s move to 1.38 against the Dollar, its highest level since October 2021, is being driven far more by US Dollar weakness than outright Pound strength. Markets are increasingly pricing in lower US interest rates later this year, which reduces the Dollar’s yield appeal and encourages investors to rotate out of USD exposure. That pressure has been reinforced by political uncertainty, including renewed talk of tariffs, the risk of a government shutdown, and President Trump’s comments last night signalling little concern about a weaker Dollar. Together, this has given markets a green light to sell the Dollar.

In terms of how far GBPUSD can go, 1.40 is the obvious psychological level and could be tested if the current narrative persists, but 1.38 is already a multi-year high and a very significant level historically. Short-term pullbacks would not be unusual after a move of this size. For those needing to buy Dollars, these levels represent a very favourable window.