Currency markets have opened the week sharply on edge following major developments in the Middle East over the weekend.
Escalating military action involving Iran has pushed oil prices higher, unsettled equity markets and strengthened the US Dollar. As a result, Sterling has come under pressure, particularly against the Dollar and currencies linked to it, including the UAE Dirham.
Here is what is driving rates this week and what it could mean if you are planning a transfer.
Why has the US Dollar strengthened?
The Dollar is behaving exactly as it typically does during periods of geopolitical uncertainty.
When risk rises globally, investors move capital toward safe, liquid assets. The US Dollar remains the world’s primary reserve currency, so it often attracts strong demand during military or political escalation.
Over the weekend:
- Tensions involving Iran intensified significantly.
- Oil prices jumped on concerns around supply disruption.
- Global stock markets opened lower.
- Demand for defensive assets increased.
This combination has pushed GBP/USD lower at the start of the week, with Sterling trading near the lower end of its recent range around 1.34.
If tensions remain elevated, the Dollar could stay supported in the short term.
GBP/USD Forecast This Week
The key question many clients are asking is simple:
Will the Dollar continue to rise this week?
There are two primary drivers to watch:
1. Middle East developments
Further escalation would likely keep the Dollar firm.
Signs of de-escalation could reduce safe-haven demand.
2. US Non-Farm Payrolls (Friday)
The US employment report remains the most influential scheduled event of the week.
If payroll data is strong:
- US interest rate expectations could shift higher.
- The Dollar may extend gains.
- GBP/USD could test lower levels near 1.33.
If payrolls disappoint:
- The Dollar could retreat.
- GBP/USD may recover toward 1.35–1.36.
Expected short-term range:
1.33 to 1.36
If you are buying US Dollars with Pounds this week, volatility risk is elevated. Splitting a transfer or setting a target level can help manage uncertainty.
For detailed guidance on transferring Pounds to Dollars, see:
https://cambridgecurrencies.com/currency-gbp-to-usd/
For the broader long-term Dollar outlook:
https://cambridgecurrencies.com/usd-forecast-2026/
And our dedicated Pound to Dollar forecast page:
https://cambridgecurrencies.com/gbp-usd-forecast/
Is it a good time to buy US Dollars?
Context matters.
Over the past year, GBP/USD has traded in a wide band. Compared to recent highs above 1.36, the current rate near 1.34 represents a weaker Pound.
For Dollar buyers:
- A higher GBP/USD rate means more Dollars per Pound.
- A lower GBP/USD rate means fewer Dollars per Pound.
Exchange rates rarely move in straight lines. They fluctuate between peaks and troughs, often triggered by major events such as geopolitical shocks or central bank shifts.
Trying to catch the absolute best rate can delay important life or business decisions. A structured approach usually produces better outcomes than waiting indefinitely.
EUR/GBP Forecast This Week
EUR/GBP has been more stable than GBP/USD, largely because the Dollar is currently the main driver of global currency movement.
However, Sterling softness has provided support to the Euro.
Short-term range expectation:
0.87 to 0.885
If geopolitical tensions intensify, Sterling could remain under pressure across multiple pairs.
If markets calm and risk appetite improves, EUR/GBP may soften slightly.
For property buyers or businesses operating between the UK and Europe, this pair currently presents less short-term volatility compared to GBP/USD.
AED/GBP Forecast This Week
The UAE Dirham is pegged to the US Dollar. This means AED/GBP typically mirrors GBP/USD movements.
When the Dollar strengthens:
- AED strengthens versus the Pound.
When the Dollar weakens:
- AED softens versus the Pound.
Given the Dollar’s current strength, AED is performing well against Sterling.
For UAE-based clients transferring funds into the UK, this may present a stronger conversion level compared to recent weeks.
However, Friday’s US employment data could change momentum quickly.
My Approach to Short-Term Forecasting
Over a one-week timeframe, it is important to filter out unnecessary noise.
This week, the genuine market movers are:
- Middle East geopolitical developments
- Oil price reaction
- US Non-Farm Payrolls
Other minor economic releases are unlikely to override these themes.
Speculative trading can amplify short-term swings. That can create opportunity, but it can also increase risk.
The focus should be on preparation rather than prediction.
Looking Beyond This Week
Over a longer horizon of three to six months, exchange rates are more heavily influenced by:
- Interest rate differentials
- Inflation trends
- Economic growth expectations
- Political stability
It is not unusual to see 5%–10% swings over a longer period.
Comparing the current rate to its 12-month and 5-year range can provide useful perspective when deciding whether to act now or wait.
The “perfect” rate rarely arrives. Structured decisions tend to work better than waiting for extremes.
Need Guidance on GBP/USD, EUR/GBP or AED/GBP?
Even a 1% movement can make a significant difference on larger transfers.
If you are:
- Purchasing property overseas
- Repatriating funds
- Paying an international invoice
- Moving capital between the UAE and the UK
A clear strategy can protect your position.
At Cambridge Currencies, we work directly with clients to:
- Monitor rates on their behalf
- Set target levels
- Stage transfers
- Lock in future rates where appropriate
If you would like to discuss this week’s rates or secure a live quote, speak with one of our currency specialists today.
