GBP/USD is forecast to trade between 1.3300 and 1.3650 in the week of 14 to 18 September 2026, and GBP/EUR between 1.1500 and 1.1750. Three central banks decide in three days: the Federal Reserve on Wednesday, the Bank of England on Thursday and the Bank of Japan on Friday. UK inflation lands the morning before the Bank decides.
What happened to the dollar last week?
Two things, and they pull the same way. The European Central Bank raised all three of its key rates by 25 basis points on 10 September, taking the deposit facility to 2.50%, the main refinancing rate to 2.65% and the marginal lending facility to 2.90%, with effect from 16 September. Then US inflation came in warm enough to make a Federal Reserve increase look close to settled.
US headline CPI held at 3.4% in the year to August 2026, with the monthly rate at 0.4%. Core CPI eased to 2.4% on the year — but the monthly core reading rose 0.3% after 0.2% in July, and that overshoot did the damage. On CME FedWatch pricing, the probability of a quarter-point rise on 16 September moved to about 88%, from 67% earlier the same day.
Sterling barely moved through it. On ECB reference rates, GBP/USD eased from 1.3530 on 4 September to 1.3508 on 11 September, and GBP/EUR firmed slightly to 1.1653. Those rates are struck at around 13:10 UK time, twenty minutes before the CPI release, so they do not capture Friday’s reaction: the dollar index traded around 99 afterwards, having briefly touched 99.36.
Will the dollar go up this week?
A rise is close to fully priced, which changes what actually moves the rate. When a hike is 88% expected, the decision itself is largely in the price and the market trades the projections instead. Wednesday’s Federal Reserve announcement at 19:00 UK time comes with a fresh Summary of Economic Projections — the dot plot — followed by the press conference at 19:30.
GBP/USD may trade broadly between 1.3300 and 1.3650. The asymmetry is worth understanding: because a hike is expected, a hike alone need not lift the dollar much, while a hold would be a genuine surprise and could knock it. The larger signal is how many further increases the dot plot shows for 2027. Our GBP/USD forecast page carries the medium-term range and our USD forecast for 2026 sets out the scenarios behind it.
This is the week sterling’s rate advantage over the dollar disappears
Here is the arithmetic, and it resolves this week. Bank Rate is 3.75%. The Fed’s target range is 3.50–3.75%, a midpoint of 3.625% — 12.5 basis points below Bank Rate. A quarter-point increase on Wednesday lifts the range to 3.75–4.00%, a midpoint of 3.875%, which sits 12.5 basis points above Bank Rate.
The Bank of England then decides the following day, and is widely expected to hold. If both play out as expected, sterling ends this week with a negative policy-rate gap to the dollar rather than a positive one — and a narrower gap to the euro as well, since the ECB’s move has already cut that from 150 to 125 basis points.
That is not a forecast about the exchange rate. Rate differentials are one input among several, and a widely expected shift is usually in the price well before it happens. But it is the structural change underneath this week’s headlines, and it is the reason the pound has less of a cushion going into the autumn than it had going into the summer.
Will the Bank of England raise rates on Thursday?
Economists broadly expect a hold. The Bank left Bank Rate at 3.75% on 30 July in a 6–3 vote, with Megan Greene, Catherine L Mann and Huw Pill preferring an immediate rise to 4.00%. Reported previews expect the same three to dissent again and put the focus on the language rather than the level, with Pantheon Economics suggesting the committee may toughen its wording to keep a November increase available.
What makes the UK genuinely different from the US is the labour market. UK unemployment was 4.9% in April to June 2026, with payrolled employees down 78,000 over the year and regular pay growth at 3.5%. The US, by contrast, added 162,000 jobs in August with unemployment at 4.1%. The Bank’s hawks want higher rates on inflation grounds while its jobs data argues the other way.
That is why Tuesday’s labour market figures at 07:00 and Wednesday’s inflation reading at 07:00 matter more than a typical data release: both land with the decision less than 48 hours away. UK CPI was 2.9% in the year to July. Our Bank of England decision page and GBP forecast track the policy path.
GBP/EUR forecast: the detail buried in the ECB’s own projections
GBP/EUR may hold a 1.1500 to 1.1750 range this week. But the reason the euro has support is in a number almost nobody quoted from Thursday’s meeting.
The ECB’s new staff projections put headline inflation at 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028 — a normal downward path. Core inflation, excluding energy and food, is projected at 2.5% in 2026, 2.6% in 2027 and 2.3% in 2028. Core is forecast to be higher next year than this year. Central banks almost always publish core profiles that converge downwards; this one does not, and the 2027 and 2028 figures were revised up against June.
That is the difference between a central bank finishing a job and one that thinks the job is getting harder. It is why “the ECB is done at 2.50%” is a weaker assumption than it looks, and why euro strength is a live risk for anyone buying euros this autumn. Our pound to euro forecast and euro outlook carry the longer view.
EUR/USD forecast: both sides already moved
EUR/USD may trade between 1.1450 and 1.1750 this week. The pair sat at about 1.1592 on ECB reference rates on 11 September and traded near 1.1600 after the US inflation release, having touched an intraday low of 1.1569.
Both central banks have now either moved or are expected to. That tends to compress the range rather than widen it, because the surprise has to come from guidance rather than from the decisions. Thursday’s final euro area inflation reading at 10:00 and Wednesday’s Fed projections are the two releases most likely to break it. The EUR/USD forecast page sets out the six-month framework, and the live currency converter shows the mid-market rate now.
What is expected from the Bank of Japan on Friday?
An increase. The Bank of Japan raised its policy rate to 1.00% on 16 June 2026, its highest since 1995, and reported previews expect a further quarter-point move to 1.25% at Friday’s decision, announced in the early hours UK time with a press conference at 07:30.
For sterling buyers this matters mainly through GBP/JPY and through the yen’s effect on broad dollar direction. Japanese inflation figures land just before the decision, at 00:30 UK time. Our GBP/JPY forecast covers the pair in detail.
The economic calendar this week at a glance
All times are UK (BST).
| Day | Key releases | Currency | Why it matters |
|---|---|---|---|
| Mon 14 Sep | ECB speakers through the day — Schnabel (10:15), Cipollone (14:00), Lagarde (16:15 and 16:35); Canadian CPI (13:30) | EUR / CAD | First guidance on how far the ECB intends to go after last week’s rise |
| Tue 15 Sep | UK labour market (07:00); Chinese industrial production and retail sales (03:00); German ZEW (10:00); US Empire State index (13:30) | GBP / CNY / EUR / USD | The last UK jobs data the MPC sees before Thursday |
| Wed 16 Sep | UK CPI, PPI and RPI (07:00); euro area industrial production (10:00); US retail sales (13:30); Fed decision and projections (19:00), press conference (19:30) | GBP / EUR / USD | The heaviest session of the week, opening and closing with inflation and the Fed |
| Thu 17 Sep | Bank of England decision, minutes and vote (12:00); euro area final HICP (10:00); US jobless claims, housing starts and Philadelphia Fed survey (13:30) | GBP / EUR / USD | The vote split and the language matter more than the level |
| Fri 18 Sep | Japanese CPI (00:30); Bank of Japan decision (from 04:00) and press conference (07:30); UK retail sales (07:00); US industrial production (14:15) | JPY / GBP / USD | A third central bank, then the UK consumer |
Release timings are as scheduled at the time of writing and can change.
What is the three to twelve month outlook for the pound?
By Friday evening the picture for the rest of 2026 will be far clearer than it is today. The Fed’s dot plot will show how many more increases its own committee expects, the Bank of England’s vote split and language will show whether its doves are moving, and the ECB’s direction is already set by projections that have core inflation rising next year.
The UK economy is not the constraint people assumed. Monthly GDP grew 0.4% in July 2026 after 0.3% in June, with services up 0.6%, and the three-month rate at 0.4%. Growth like that removes one argument against tightening, even as the jobs figures point the other way. The Bank’s remaining 2026 decisions are 17 September, 5 November and 17 December.
None of this is settled. A single surprising release or a shift in energy prices can move a major pair by more than a cent in a session, and a forecast is a framework for planning rather than a statement of where the rate will be on any given day. The currency forecast hub carries the pair-by-pair ranges.
What does this week mean for your currency transfer?
Three decisions in three days is a wider spread of outcomes than a normal week, and the width of the range is what costs money. On a £400,000 transfer, converting GBP/USD at an illustrative 1.3650 rather than 1.3300 is the difference between $546,000 and $532,000 — $14,000 on the same pounds.
On the euro side, the same £400,000 at an illustrative 1.1750 rather than 1.1500 gives €470,000 against €460,000, a gap of €10,000. For anyone completing a property purchase in Spain or funding a dollar settlement in the United States, that is the cost of letting the timing fall wherever the funds happen to clear.
How can you manage the risk around three central bank decisions?
A week like this is the case the standard tools exist for. A forward contract fixes today’s rate for settlement up to twelve months ahead, taking Wednesday, Thursday and Friday out of the equation entirely if the requirement is already known. A market order targets a level you would be content to trade at and executes if the market reaches it, including overnight — which matters when the Bank of Japan decides while the UK is asleep.
Splitting a large requirement into tranches spreads the exposure across several sessions rather than resting it on one announcement, which suits a deadline weeks rather than days away. Which approach fits depends on your timetable and how much movement you can absorb, not on a view about the rate.
Frequently asked questions
Will the dollar rate increase this week?
A Federal Reserve rate rise on Wednesday 16 September is close to fully priced, at about 88% on CME FedWatch pricing after the August inflation figures. Because it is expected, the decision itself may move the dollar less than the accompanying projections do. GBP/USD may trade between 1.3300 and 1.3650 across the week.
Is the Bank of England expected to raise rates on 17 September 2026?
Reported previews expect a hold at 3.75%, with the same three members — Megan Greene, Catherine L Mann and Huw Pill — voting for a rise to 4.00% as they did on 30 July. The decision, minutes and vote are published together at 12:00 UK time on Thursday.
What did the ECB do on 10 September 2026?
It raised all three key rates by 25 basis points, taking the deposit facility to 2.50%, the main refinancing operations rate to 2.65% and the marginal lending facility to 2.90%, effective 16 September 2026. Its new staff projections put headline inflation at 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028, with the 2027 and 2028 figures revised up against June.
What is the most important event for the pound this week?
Wednesday. UK inflation at 07:00 is the last major domestic input before the Bank of England decides, and the Federal Reserve announcement at 19:00 sets the dollar tone that drives GBP/USD. Thursday’s Bank of England vote split then determines how sterling ends the week.
Why does a US rate rise matter for the pound?
Because it changes the return on holding dollars relative to sterling. Bank Rate is 3.75% and the Fed’s range midpoint is 3.625%. A quarter-point US increase would put that midpoint at 3.875%, above Bank Rate. Interest-rate differentials are one of several drivers of an exchange rate, but a shift in the direction of the gap is a structural change rather than a passing one.
Should I buy currency before or after the central bank decisions?
That depends on your deadline rather than on a forecast. If the payment is due within days, the practical question is whether you could absorb a move of a cent or more against you between Wednesday evening and Friday morning. If it is months away, you have room to plan. A forward contract removes the event risk, a market order targets a level, and splitting the amount spreads the timing.
What is the minimum transfer Cambridge Currencies handles?
Cambridge Currencies works with transfers from £5,000 upwards, at competitive rates compared with high-street banks. Every transaction is completed by phone with a dedicated specialist, and the firm operates with FCA-authorised partners Currencycloud and ScioPay.
Speak to a specialist before Wednesday
If you have a euro, dollar or yen payment due this month — an overseas completion, a business settlement or a large one-off transfer — three decisions in three days is a week to plan rather than watch. Speak to a Cambridge Currencies specialist about timing your transfer around the Fed and the Bank of England, or call 01223 608232. Every transfer is handled personally, over the phone, by a dedicated dealer who knows your deadline.
Related guides
- Weekly currency forecast archive — published every Sunday
- Should I buy US dollars now? — how to weigh a deadline against a rate view
Sources: European Central Bank — monetary policy decisions, 10 September 2026; European Central Bank — key ECB interest rates; European Central Bank — euro foreign exchange reference rates; US Bureau of Labor Statistics — Consumer Price Index, August 2026; US Bureau of Labor Statistics — Employment Situation, August 2026; Office for National Statistics — Labour market overview, August 2026; Office for National Statistics — GDP monthly estimate, July 2026; Bank of England — July 2026 Monetary Policy Summary and minutes; Bank of England — upcoming MPC dates; Federal Reserve — FOMC statement, 29 July 2026; Federal Reserve — FOMC calendar; market pricing and post-CPI levels, reported 11 September 2026; economists’ previews of the September Bank of England decision, reported September 2026; Bank of Japan rate rise to 1.00%, reported 16 June 2026. Release timings are as scheduled at the time of writing.
