Author, Andrew Gibson
A GBP to USD forecast is an expectation of the exchange rate in the future – whether days, weeks, or even years away. Exchange rate forecasts help banks, businesses and individuals, make better-informed decisions.
Is it a good time to buy USD with GBP?
An easy way to tell whether it’s a good or bad time to buy US Dollars is to look at recent history.
Over the past 5 years, the GBP/USD rate has been as high as $1.4328 and as low as $1.1492.
Based on the GBP/USD rate over the past 5 years, now is a pretty good time to buy US Dollars with British Pounds because the exchange rate is closer to the top-end of the historical trading range.
The higher the exchange rate, the cheaper it is to buy US Dollars with British Pounds.
Will the Pound get stronger against the US Dollar?
2021 was a mixed year for the GBP/USD rate – rising in the first half of the year, but then falling in the second half of the year. We enter 2022 with no clear trend in the GBP/USD exchange rate.
In 2022, the hope is that Covid risks subside and the economic recovery gains traction.
Under this base case, the GBP/USD rate will be strongly influenced by the relative growth of the UK and US economies.
The IMF is forecasting the UK economy will grow by 6.8% in 2022 compared to US economic growth of 6.0%. What’s more, the Bank of England has begun raising interest rates before the US Federal Reserve.
These two fundamental factors are expected to be positive for the GBP/USD rate in 2022.
We don’t see any major election risks on the horizon. The UK and US are not due their next national elections until 2024.
Other political issues may arise though.
For example, the US and China have a tense relationship (world supremacy will do that).
And the UK and EU are forever squabbling over Brexit and anything else they can think of.
If a major political event happens, it will likely change the course of the GBP/USD exchange rate.
Forecasting exchange rates is not an exact science. It is simply about making an informed judgement based on what is presently known or can be anticipated.
GBP to USD Forecast Poll (1 week, 1 month, 1 quarter)
There are countless methods and models used to forecast GBP/USD rates.
A simple way to see what the overall consensus is among analysts is to check out the GBP/USD Forecast Poll on FX Street.
It lists the views of 38 analysts over 1 week, 1 month and 1 quarter timeframes.
To make things easy, there is a graph at the top of the page that summarises the consensus view.
You can then see if there is a Bullish or Bearish bias over each of the time periods.
A bullish bias means analysts are forecasting the Pound will rise against the US Dollar. Conversely, a bearish bias indicates the Pound is expected to fall.
Don’t be concerned by the fact that there is plenty of disagreement among analysts. That’s normal.
The point of forecasting is never to reach certainty. You will only ever have certainty in hindsight.
Forecasting is about probability.
GBP to USD Forecast Weekly (my short-term approach)
A timeframe of only 1 week warrants a different approach to someone looking at longer time horizons.
Over 1 week, there’s only a small amount of economic news that will take place.
It’s worth looking at what’s scheduled on the DailyFX Economic Calendar.
I prefer the DailyFX calendar because it shows the impact each number is expected to make (low, medium or high).
My approach is to focus only on the high impact numbers. These are the ‘market movers’. The rest is often just noise.
It’s a good idea to look at recent GBP/USD price history – looking for trends and trading ranges.
A lot of movement in exchange rates is due to speculators buying and selling currencies for profit. They can cause a lot of the ups and downs – and provide you with opportunities.
If you don’t feel confident going it alone, you may wish to speak with a money transfer service that can help.
We can discuss current rates, target levels and even let you know if the rate moves in your favour.
To find out more about Key Currency, or check out our latest rates, click below.
GBP to USD Forecast (next 6 months and beyond)
The longer the time period, the great the chance of big moves in exchange rates.
When you look at the difference between the highs and lows in GBP/USD rate over the past year alone, you will appreciate how much currencies do fluctuate over time.
A 1%-2% swing would be considered a big move over the course of a week, however over a year or more; it’s not unusual to see swings of 5%-10%.
In effect, the opportunities (and risks) are greater.
Timing matters even more.
My practical advice for anyone looking at long-term GBP/USD forecasts is to use historical rates as your guide and to keep your expectations realistic.
Personally, I always look at the current exchange rate in comparison to the last 1 year and 5 years.
Beyond 5 years, I think exchange rates lose relevancy to today’s world.
On whatever timeframe you choose, you will notice that exchange rates hit peaks and troughs on a fairly frequent basis.
In terms of the GBP to USD exchange rate, a peak is good for buyers of Dollars, and a trough is good for sellers of Dollars.
Your aim is to take advantage of favourable fluctuations.
One thing to note – the ‘perfect time’ never comes along.
I’ve met people that are hanging on for something that will never happen. The hidden cost is their life plans are put on hold while they wait.
Exchanging money is about trying to achieve the best rate possible and then moving on with your life.
Need guidance on GBP/USD exchange rates?
Getting a good or bad GBP/USD exchange rate can make a big financial difference to you.
But trying to navigate the world of foreign exchange can be stressful, particularly if it’s something you are not overly familiar with.
At Key Currency, the way we operate is fundamentally different from a lot of other money transfer companies.
Most companies you will come across these days are really just online systems or apps.
There is no human assistance.
In contrast, an important part of our service is to monitor exchange rates on behalf of our clients and help them take advantage of favourable moves.
At Key Currency, we give you a one-to-one service, allowing us to understand your requirements and exchange your money to your best advantage.
We have attained a 5-star rating on Trustpilot, based on over 900 verified customer reviews.
Rest assured, Key Currency is an FCA regulated Authorised Payment Institution (No. 753989), and as such, all money transfers are conducted through safeguarded client accounts.
If you would like to find out our latest rates or just want to discuss GBP to USD forecasts, please request a free quote below.