GBP/USD is trading near 1.35 and GBP/EUR near 1.17 as the week of 11 August 2026 opens. Over the next month sterling is forecast to hold roughly 1.33–1.37 against the dollar and 1.15–1.19 against the euro, with the US inflation print and the diverging paths of the Bank of England, Federal Reserve and European Central Bank the dominant drivers.
The pound enters the week close to its strongest levels of 2026 on both major crosses. It is being pulled by two forces at once: a Bank of England that held rates but leans hawkish, and a US dollar knocked back by a weak July jobs report. This forecast sets out realistic ranges for GBP/USD and GBP/EUR, the events that could move them, and what the picture means if you have a transfer to plan.
Where does the pound stand right now?
On 7 August 2026 GBP/USD settled around 1.3492 and GBP/EUR around 1.1673, according to market data compiled by Pound Sterling Live. Both sit within touching distance of their 2026 peaks — GBP/EUR reached about 1.18 in mid-July, its highest in 13 months, before easing back.
Against the dollar, sterling has been the beneficiary rather than the driver. The US currency fell after a soft payrolls release, and the pound rose with most of its peers. Against the euro, the move has been the other way: GBP/EUR has drifted down from its July high as the single currency held firm. For anyone converting pounds, the practical takeaway is that the euro rate is off its best while the dollar rate is near its best — a useful contrast covered further in our guidance on whether now is a good time to exchange money.
What is driving the pound this week?
Three central-bank decisions in late July set the backdrop, and one US data release reset it. Interest-rate differentials remain the core mechanism: a currency tends to firm when its central bank is expected to hold rates higher for longer relative to its peers. Our explainer on how interest rates affect exchange rates sets out why.
| Central bank | Latest decision | Rate now | Stance | Next meeting |
|---|---|---|---|---|
| Bank of England | Held, 30 July 2026 | 3.75% | 6–3 hold; three members preferred a rise to 4.00% | 17 September 2026 |
| Federal Reserve | Held, 29 July 2026 | 3.50%–3.75% | Three dissents preferred a hike | September 2026 |
| European Central Bank | Held, 23 July 2026 | 2.25% (deposit) | Held; data-dependent | September 2026 |
The Bank of England’s July Monetary Policy Summary kept Bank Rate at 3.75% but recorded a 6–3 split, with three members voting to raise. The Committee noted CPI inflation at 2.6% and warned it is expected to rise later this year as higher energy prices feed through. That hawkish tilt is what has kept a floor under the pound.
The Federal Reserve held its target range at 3.50%–3.75% on 29 July, also with three dissenters — but there they wanted a hike, citing inflation still above the 2% goal. The European Central Bank left its deposit rate at 2.25% on 23 July and signalled a data-dependent path.
Why did the pound rise even though the Bank of England held?
Because the move came from the other side of each pair. On 7 August the US Bureau of Labor Statistics reported that the economy shed 23,000 jobs in July against expectations of an 80,000 gain, with a combined 103,000 cut from the prior two months’ estimates. The unemployment rate ticked down to 4.1%, but only because workers left the labour force.
Markets read that as evidence of a cooling US economy. The Dollar Index fell around 0.5% on the day and traders trimmed the odds of a further Fed hike, lifting GBP/USD. The signal here is worth holding onto: sterling’s strength against the dollar is currently borrowed from dollar weakness, not built on UK momentum. That distinction matters when you judge how durable a rate is likely to be, as our note on how inflation data moves currencies explains.
GBP/USD forecast: short-term outlook and range
GBP/USD is forecast to trade broadly between 1.33 and 1.37 over the coming weeks, with the balance of risk tied to US inflation. A softer-than-expected US CPI reading mid-week could extend the dollar’s decline and push the pair toward the top of that range; a hot print would revive the Fed’s hawkish camp and pull it back toward 1.33.
The structural picture is a narrow rate gap: the Bank of England at 3.75% sits only modestly above the Fed’s 3.50%–3.75% range, so GBP/USD is likely to remain sensitive to each new data point rather than trending strongly in either direction. For context on the pair over time, see our GBP to USD exchange rate guide.
GBP/EUR forecast: short-term outlook and range
GBP/EUR is forecast to hold a 1.15–1.19 range in the near term. The pound retains a clear yield advantage here — 3.75% against the ECB’s 2.25% — which has underpinned the pair through 2026 and helped it reach 1.18 in July. The pullback since then looks more like profit-taking after an overbought move than a change in direction.
The euro’s own resilience is the swing factor. If eurozone data holds up and the ECB stays on hold, GBP/EUR may struggle to reclaim 1.19 quickly; any softening in European sentiment could let sterling’s rate advantage reassert itself. Those moving euros back to the UK can compare methods in our guide to transferring a large amount of euros to pounds.
What is on the economic calendar for the week of 11 August 2026?
The single biggest scheduled risk event is the Reserve Bank of Australia’s rate decision on Tuesday 11 August, which will set the tone for the Aussie dollar and wider risk sentiment. For sterling directly, the week is lighter on top-tier UK data, so the pound is likely to take its lead from abroad.
The key global release is US inflation data due mid-week. With US CPI running at about 3.5% year-on-year, another firm reading would challenge the market’s dovish reaction to the jobs report, while a cooler number would reinforce it. UK retail figures from the British Retail Consortium and the UK’s own monthly and second-quarter GDP estimates, expected in mid-August, round out the diary. Because a single surprise can move a rate by a full percentage point in a day, knowing the calendar ahead of a transfer is part of managing the outcome.
What is the 3 to 12 month outlook for sterling?
Over a three-to-twelve-month horizon, the pound’s direction is expected to hinge on whether UK inflation re-accelerates as the Bank of England fears. If it does, and the three hawkish dissenters gain support, the prospect of a move back toward 4.00% would tend to support sterling. If inflation instead falls back and UK growth slows, the case for holding — or eventually easing — would weigh on the pound.
Against the dollar, much depends on how quickly the US labour market cools. A run of weak jobs data could open the door to Fed easing and a softer dollar, which would be broadly supportive of GBP/USD. Against the euro, the pound’s rate advantage may keep GBP/EUR underpinned unless the ECB turns more optimistic on growth. None of these paths is certain, and forecasts several months out carry wide margins of error — which is precisely why fixing costs in advance appeals to many with large sums to move.
What does this mean for your currency transfers?
Small percentage moves become large cash sums on the amounts our clients typically deal with. Consider two illustrative examples at round, illustrative rates rather than today’s live price.
On a £500,000 transfer to the eurozone, exchanging at 1.19 rather than 1.15 is the difference between receiving €595,000 and €575,000 — a swing of €20,000 on the same pounds. On a £250,000 transfer to the United States, moving at 1.37 rather than 1.33 is the difference between $342,500 and $332,500 — a $10,000 gap. Those are the stakes behind a two- or three-cent range.
If you are buying property, the timeline is rarely yours to control, which is why buyers exchanging pounds for euros often plan around a completion date rather than a rate. Our guides to sending money to Spain from the UK and to buying property abroad set out the practical steps, and dollar-side buyers can follow the same logic in our guide to sending money to the USA.
How can you manage timing and risk in this market?
There is no single right moment to exchange, but there are tools that remove some of the guesswork. A spot transaction is an exchange at the current market rate for near-immediate settlement — explained in full in our note on what a spot transaction is. A forward contract lets you fix today’s rate for a transfer up to a set point in the future, which is why it is popular with property buyers and businesses facing a known payment; see how forward contracts work.
Some clients split a large sum, converting a portion now and staging the rest, to avoid committing everything at a single price. Others set a rate alert so they are notified when a target level trades. Each approach carries its own trade-offs, and the right mix depends on your deadline, the size of the transfer and how much rate movement you can tolerate. Cambridge Currencies operates through FCA-authorised partners, and every transaction is completed by phone with a dedicated specialist who can talk through the options for your situation.
Frequently asked questions
Is the pound strong right now?
Sterling is close to its strongest levels of 2026 against both the US dollar and the euro, trading near 1.35 and 1.17 respectively in early August 2026. Its firmness against the dollar owes much to recent dollar weakness following a soft US jobs report, rather than to UK-specific strength.
What is the GBP/EUR forecast for the next month?
GBP/EUR is forecast to trade broadly between 1.15 and 1.19 in the near term. The pound’s interest-rate advantage over the eurozone is supportive, but the euro’s own resilience may cap gains unless European data softens.
What is the GBP/USD forecast for the next month?
GBP/USD is forecast to hold roughly 1.33 to 1.37, with US inflation data the key swing factor. A cooler US CPI reading could push the pair higher; a hotter one could revive Fed hawkishness and pull it back.
Will the Bank of England raise interest rates?
The Bank held Bank Rate at 3.75% on 30 July 2026, but three of the nine Monetary Policy Committee members voted to raise it to 4.00%, and the Bank expects inflation to rise later in the year. A future increase cannot be ruled out, though the majority preferred to wait for more evidence. The next decision is scheduled for 17 September 2026.
Why did the US dollar fall in early August 2026?
The dollar weakened after the July employment report showed the US economy shed 23,000 jobs against expectations of a gain, with sizeable downward revisions to prior months. Markets read this as a sign of a cooling economy and trimmed expectations for further Fed rate rises.
Should I use a forward contract to fix my rate?
A forward contract fixes today’s exchange rate for settlement at a future date, which can give certainty when you have a known payment such as a property completion. Whether it suits you depends on your deadline and how much rate movement you can tolerate; a specialist can explain the trade-offs for your specific transfer.
How much could the rate change over the next few months?
Forecasts several months out carry wide margins. Sterling’s medium-term path depends largely on whether UK inflation re-accelerates and how quickly the US labour market cools — both of which could move rates by several cents in either direction.
Speak to a specialist about your transfer
If you have pounds to convert to euros or dollars in the coming weeks — for a property purchase, a business payment or moving funds home — a Cambridge Currencies specialist can talk you through the timing options and current market conditions on your specific corridor. Request a quote and speak to your dedicated specialist by phone.
This article is provided for general information and market insight only. It does not constitute a recommendation to buy or sell any currency. Exchange rates can move quickly and past movements are not a guide to future performance.
