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Pound Sterling up to best level against the US dollar since July 2025: "

ended 27. January 2026

POUND Sterling up to best level against the US Dollar since July 2025 as experts said 

The Pound is currently trading at its best levels against the US Dollar since July 2025.

Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange commented:

"US Dollar buyers are seeing the best GBPUSD rates since July 2025. UK shop price inflation rose to 1.5% in January, signalling the Bank of England may keep interest rates higher for longer to hit its 2% target. This supports the pound while the US economy faces a setback as Winter Storm Fern could shave up to 1.5% off US Q1 GDP growth. British holidaymakers heading to the US and importers of American goods now have increased purchasing power. UK investors also get better value when buying US assets. Conversely, UK exporters suffer as their goods become more expensive for Americans, and FTSE 100 firms with massive US revenues will see those profits shrink when converted back to a stronger pound. Ultimately, the market’s direction depends on UK inflation trends and the speed of the US recovery from the storm."

 



 

David Belle, Founder and Trader at Fink Money commented:

"Likely due to weaker dollar as everyone is buying metals (which are predominantly traded in USD). It means if you buy gold or silver, you're effectively short the dollar. This depresses the dollar even if there isn't any actual extra demand for sterling which means GBPUSD still rises."

 



 

Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial commented:

"The dollar is weak, but that doesn’t mean the pound is strong. If you compare sterling to Euro it’s clear the position doesn’t look so good, and our European neighbours is who we should be benchmarking our economy against. At present, it’s more expensive holidays and imports from abroad unless you fancy a trip across the pond; but who wants to go there at the moment?!"

 



 

Prem Raja, Head of Trading Floor at Currencies 4 You commented:

"Sterling has pushed to multi-month highs against the US Dollar, trading around 1.37, driven by a combination of cyclical and structural factors. The dominant theme has been the re-emergence of the “short US” trade, with investors increasingly positioning for a weaker Dollar through 2026. Expectations of lower US interest rates later this year have reduced the Dollar’s yield advantage, while persistent geopolitical uncertainty and renewed tariff rhetoric have added further pressure. Rather than seeking safety in the Dollar, markets have favoured alternative hedges, notably gold and silver, which have seen strong inflows. In contrast, the Pound has benefited from relatively stable UK data and a perception that UK rate cuts may be more measured. While near-term corrections are always possible, the broader balance of risks suggests the Dollar could remain on the defensive, keeping GBP/USD supported as the year progresses."

 


 

4 responses from the Newspage community

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Editor
Tony Redondo
Founder at Cosmos Currency Exchange
US Dollar buyers are seeing the best GBPUSD rates since July 2025. UK shop price inflation rose to 1.5% in January, signalling the Bank of England may keep interest rates higher for longer to hit its 2% target. This supports the pound while the US economy faces a setback as Winter Storm Fern could shave up to 1.5% off US Q1 GDP growth. British holidaymakers heading to the US and importers of American goods now have increased purchasing power. UK investors also get better value when buying US assets. Conversely, UK exporters suffer as their goods become more expensive for Americans, and FTSE 100 firms with massive US revenues will see those profits shrink when converted back to a stronger pound. Ultimately, the market’s direction depends on UK inflation trends and the speed of the US recovery from the storm.
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Editor
Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
The dollar is weak, but that doesn’t mean the pound is strong. If you compare sterling to Euro it’s clear the position doesn’t look so good, and our European neighbours is who we should be benchmarking our economy against. At present, it’s more expensive holidays and imports from abroad unless you fancy a trip across the pond; but who wants to go there at the moment?!
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Premium
David Belle
Founder and Trader at Fink Money
Likely due to weaker dollar as everyone is buying metals (which are predominantly traded in USD).

It means if you buy gold or silver, you're effectively short the dollar.

This depresses the dollar even if there isn't any actual extra demand for sterling which means GBPUSD still rises.
Copy

Premium
Prem Raja
Head of Trading Floor at Currencies 4 You
Sterling has pushed to multi-month highs against the US Dollar, trading around 1.37, driven by a combination of cyclical and structural factors. The dominant theme has been the re-emergence of the “short US” trade, with investors increasingly positioning for a weaker Dollar through 2026. Expectations of lower US interest rates later this year have reduced the Dollar’s yield advantage, while persistent geopolitical uncertainty and renewed tariff rhetoric have added further pressure. Rather than seeking safety in the Dollar, markets have favoured alternative hedges, notably gold and silver, which have seen strong inflows. In contrast, the Pound has benefited from relatively stable UK data and a perception that UK rate cuts may be more measured. While near-term corrections are always possible, the broader balance of risks suggests the Dollar could remain on the defensive, keeping GBP/USD supported as the year progresses.