GBP/USD Forecast: Sterling Steady in 1.3500–1.3600 Range as Euro Strength Lifts Pound

GBP/USD Holds Firm, Riding Euro Momentum

The British Pound (GBP) remains well bid and continues to appreciate modestly, primarily supported by the strength in the Euro (EUR). The GBP/USD pair, often referred to as "Cable," is expected to hold within a 1.3500 to 1.3600 trading band in the near term.

GBP as a Reserve Currency & Dollar Alternative

With the global de-dollarization trend gaining attention, Sterling has seen a positive revaluation as a potential alternative reserve currency. Its one-week deposit rate of 4.25% makes it an attractive short-term investment option in a relatively calm FX market environment.

UK Calendar: Jobs Data & Spending Review in Focus

This week’s economic calendar includes:

UK Jobs Report (Tuesday)
UK Government Spending Review (Wednesday)

Neither event is expected to significantly shift Sterling's trajectory, although short-term volatility is possible.

Interest Rate Outlook: Bank of England in Play

While the market is currently pricing in around 36 basis points of cuts for 2025, analysts anticipate two 25-basis point cuts from the Bank of England (BoE) before the end of the year. This could pose modest downside risks for the GBP.