Rising oil prices and escalating Middle East tensions dominate the GBP/USD forecast this week. The pound is under pressure and currency markets remain highly volatile. GBP/USD sits at 1.3251 as I write this on Sunday morning — down over half a percent on the day and around 1.7% lower than a month ago. GBP/EUR is at 1.1519, GBP/CAD at 1.8424, and GBP/JPY near 212.60.
If you are planning an international transfer in the days ahead, here is what you need to understand about where markets stand and what is likely to drive exchange rates this week. You can also read our US dollar forecast for 2026 for a broader view of where the dollar is heading through the year.
GBP/USD Forecast Summary — Week of 30 March 2026
| Current rate | 1.3251 |
| Expected range this week | 1.31 – 1.34 |
| Bias | Slight downside risk |
| Key driver | Middle East conflict and oil prices |
| Biggest risk | Escalation pushing oil above $110 |
| Next key event | Powell speech Monday / UK GDP Tuesday |
Why Is the British Pound Falling This Week?
The backdrop to everything right now is the US-Israeli military conflict with Iran, which began on 28 February 2026. The strikes hit Iranian military and nuclear infrastructure. Iran responded by restricting traffic through the Strait of Hormuz — the narrow corridor carrying approximately one fifth of the world’s oil and liquefied natural gas each day.
The economic consequences have been considerable. Brent crude trades above $104 per barrel. Markets have whipsawed on every diplomatic headline. On Wednesday, reports emerged that Trump sent a 15-point ceasefire plan to Iran via Pakistan. Oil fell, stocks rallied. By Thursday, Tehran flatly rejected any negotiations. Oil jumped straight back above $104. That back-and-forth is now the daily rhythm of currency markets.
The UK imports around 40% of its oil and up to 60% of its natural gas. That makes the pound more sensitive to energy shocks than many comparable economies. GBP/USD peaked at 1.3824 in late January — we sit around 5 cents below that level today. The pound has held up better than many expected. But uncertainty around the conflict’s duration keeps a lid on any meaningful recovery.
Bank of England: Rate Hikes Back on the Table
The single biggest shift in the UK currency picture this month is the complete reversal of Bank of England rate expectations.
At the start of 2026, markets priced in two rate cuts this year. That view has now flipped entirely. The Bank held rates unanimously at 3.75% at its 19 March meeting. It signalled that the energy shock would push UK CPI inflation to around 3.5% by Q3 — far above the 2% target.
Markets now price in rate hikes rather than cuts. JP Morgan’s chief UK economist says a hike at the 30 April meeting is possible if inflation surprises to the upside. Deutsche Bank scrapped its forecast for any cuts in 2026. Oxford Economics does not expect a cut until mid-2027.
The Stagflation Problem
Rate hikes should support the pound — higher rates attract capital. Sterling has shown some resilience. But the energy shock driving inflation higher is also dragging on growth. GDP expanded just 0.1% in Q4 2025. Consumer confidence hit near record lows in March. Rising prices alongside weak growth is the classic stagflation bind — a difficult environment for the pound to rally in.
The March inflation data lands on 22 April. It will be the first reading to capture the full energy price shock. That data sets the tone for the 30 April MPC decision — watch it closely.
Key Events This Week That Could Move GBP/USD
This is a shortened trading week. Good Friday on 2 April is a UK and US bank holiday, which means all of the important data is concentrated into Monday through Wednesday. Liquidity will thin from midday Wednesday, which can exaggerate moves on any late headlines.
Monday 30 March — Eurozone CPI (HIGH): German and broader eurozone inflation data. One of the first major readings to potentially reflect some of the energy price shock. A higher-than-expected print would pressure the ECB and could weaken the euro against sterling.
Monday 30 March — Fed Chair Powell Speech (HIGH): The most important scheduled event of the week. Markets will be watching for any signal on how the Fed views the energy-driven inflation shock and whether US rate cut expectations need to be revised. Analysts at TD Securities have suggested the Fed is more likely to remain in “wait and see” mode — but any hawkish language from Powell would support the dollar and weigh on GBP/USD.
Tuesday 31 March — UK GDP Final Reading (HIGH): The final Q4 2025 figure is released Tuesday morning. The initial reading came in at 0.1% growth. Any downward revision adds to the weak growth narrative and could weigh on sterling.
Tuesday 31 March — Eurozone HICP Flash Estimate (HIGH): The broader eurozone inflation reading follows. Another high-impact release for EUR pairs.
Tuesday 31 March — US JOLTS Job Openings (MEDIUM): An early read on US labour market conditions ahead of payrolls week. A weaker-than-expected number would ease dollar strength.
Tuesday 31 March — Canadian GDP (MEDIUM): Monthly Canadian GDP data. Worth watching for GBP/CAD direction.
Wednesday 1 April — US ADP Employment Change (HIGH): Private payrolls data. A strong number supports the dollar; a weak number eases it.
Wednesday 1 April — US Retail Sales (HIGH): Alongside ADP, this will set the dollar’s tone heading into the long weekend.
Wednesday 1 April — ISM Manufacturing PMI (HIGH): Markets will be watching for early signs of whether the energy shock is beginning to show up in US economic activity.
All week — Middle East headlines: More important than any single data release. Any credible sign of ceasefire progress would push oil sharply lower, ease rate hike expectations, and likely push GBP/USD back toward 1.34–1.35. Further escalation — particularly if oil breaks toward $120 — would increase pressure on the pound.
GBP/EUR Forecast: Range-Bound but Watching the ECB
GBP/EUR is at 1.1519, marginally lower on the week but broadly within the range seen across 2026. The eurozone faces similar energy challenges to the UK — Europe is in some respects even more exposed to Middle Eastern gas supply disruption. The ECB held rates at 2.0% in March and flagged that the energy shock would delay its return to target.
Both central banks sit in the same holding pattern. Neither wants to cut into rising inflation. Neither wants to hike aggressively into a weakening economy. The result is a contained GBP/EUR range. Which bank moves first will determine the direction — and how quickly the conflict develops matters enormously. Read our euro forecast for more detail on EUR direction through 2026.
GBP/CAD Forecast: Oil Crosswinds Keeping the Range Tight
GBP/CAD is around 1.8424. Canada is a significant oil exporter, which means higher oil prices typically support the Canadian dollar and put downward pressure on GBP/CAD. But Canada’s economy is also heavily tied to the US, and global growth uncertainty is weighing on risk appetite. These forces are broadly offsetting, keeping GBP/CAD contained. Canadian GDP on Tuesday is the key release to watch this week.
GBP/JPY Forecast: Yen Remains Well Supported
GBP/JPY is at 212.60, down marginally on the week. The yen has gained around 8.7% against the pound over the past year as rising geopolitical tensions have reinforced its safe-haven status, and the Bank of Japan’s gradual policy normalisation has added further support. The trend of the past 12 months has consistently favoured yen strength — whether that continues depends largely on how the conflict develops.
What This Means If You Have a Transfer Coming Up
Volatility is meaningfully elevated right now. The Middle East conflict creates genuine daily swings in oil prices. Those swings feed directly into currency markets. On a £250,000 transfer, a two-cent move in GBP/USD is worth around £3,800 — and that kind of move happened multiple times this week alone.
If you have a transfer coming up in the next one to three weeks, speak to our team now. A property purchase abroad, a business payment, or a large personal transfer all carry more timing risk than usual in this environment.
If the current rate works for your budget, lock it in via a forward contract. This removes the risk of rates moving against you while the conflict remains unresolved. If you need to wait, we monitor the market and act when your target rate is reached — so you are not watching screens yourself.
Get in touch with Cambridge Currencies to discuss your transfer and find the best approach for your situation.
Frequently Asked Questions
Will the pound go up this week?
Possibly, but only if Middle East tensions ease. Our expected range is 1.31–1.34. The bias is slightly to the downside while oil remains above $100.
Why is the pound falling against the dollar?
The US-Israel conflict with Iran has pushed oil prices sharply higher, raising UK inflation fears and forcing the Bank of England to keep rates on hold rather than cut.
Is now a good time to buy US dollars?
GBP/USD at 1.3251 is around 5 cents below January’s high of 1.3824. Rates could move either way this week. Speak to our team before deciding.
Should I buy euros now or wait?
GBP/EUR at 1.1519 is broadly mid-range for 2026. If the rate works for your budget, locking it in now removes the risk of it moving against you.
What is the GBP/USD forecast for next week?
Our expected range is 1.31–1.34. Powell’s speech Monday and UK GDP Tuesday are the key scheduled events, but Middle East headlines will dominate.
This article is provided for informational purposes only and does not constitute financial advice. Exchange rates can move against you as well as in your favour. Please speak to a qualified member of our team before making any decisions about timing an international transfer.
