GBP/USD is forecast to trade between 1.34 and 1.38 in the week ahead, with US Non-Farm Payrolls on Friday and an unusually hawkish Bank of England the dominant drivers. EUR/USD looks supported above 1.16 after the ECB hinted at a June hike, while GBP/EUR holds near multi-week highs around 1.16.
Where the major pairs closed last week
| Pair | Friday 1 May 2026 close | Year-to-date |
|---|---|---|
| GBP/USD | ~1.3568 | +0.7% |
| EUR/USD | ~1.1700 | Steady |
| GBP/EUR | ~1.1590 | Firm |
Mid-market reference rates, not dealing rates. For a tradable quote, speak to a Cambridge Currencies specialist.
Three central banks, three uncomfortable holds
The Fed split 8-4 — its widest dissent since October 1992. Stephen Miran wanted a cut; three others (Hammack, Kashkari, Logan) opposed the statement’s easing bias. The federal funds range stayed at 3.50%–3.75%, but a Fed cut is no longer the path of least resistance. Powell’s term ends 15 May; Kevin Warsh is expected to be confirmed the week of 11 May.
The Bank of England held Bank Rate at 3.75% in an 8-1 vote, with Chief Economist Huw Pill dissenting in favour of a hike. The Bank also abandoned its single central inflation projection for the first time, publishing three scenarios. Its central case implies at least two rate increases over the coming year. Four other MPC members signalled they would back hikes if energy shocks intensify.
The ECB held the deposit rate at 2.00% but Christine Lagarde said policymakers had “debated at length and in depth” a hike. Eurozone inflation reached 3.0% in April. Markets now price 93% odds of an ECB hike in June and roughly three quarter-point hikes by year-end.
The common driver is oil. Brent touched $114 last week — the highest since June 2022 — before settling near $108 on Friday. The Strait of Hormuz remains effectively shut despite the 8 April US-Iran ceasefire.
GBP/USD: the BoE shifts the pair higher
Sterling gained 2.6% against the dollar in April. GBP/USD is forecast to trade between 1.34 and 1.38 in the week ahead, with technical resistance at the 1.3640 February high. Friday’s NFP is the binary risk: a hot wages print could drag the pair toward 1.34; a soft print would likely test 1.37. Our broader GBP/USD analysis covers the longer-term drivers.
GBP/EUR: sterling holds the edge — for now
GBP/EUR closed last week around 1.1590, a multi-week high. Both central banks are now hawkish, but the BoE went further. The pair is forecast to trade between 1.155 and 1.165 in the week ahead. Eurozone retail sales and Thursday’s UK municipal elections will set the tone. Polling suggests Labour faces a meaningful setback, which could weigh on sterling if results raise speculation about a leadership challenge.
For property buyers in Spain, France, Portugal and Italy, this is the strongest GBP/EUR has reached in 2026. See our property currency planning page or the live pound to euro forecast.
EUR/USD: divided Fed meets a hawkish ECB
EUR/USD recovered from three-week lows to close near 1.17 on Friday. The pair is forecast to trade between 1.16 and 1.185, with 1.1850 as a major technical barrier. NFP is the dominant input. For corporates with cross-currency exposure, our business FX team regularly structures forward cover for known future invoices.
The week ahead
| Day | Key event | Why it matters |
|---|---|---|
| Mon 4 May | UK bank holiday | Thin liquidity; gap risk |
| Tues 5 May | RBA decision; Swiss CPI; US ISM Services | RBA may hike to 4.10% |
| Wed 6 May | China services PMI; US ADP | NFP preview |
| Thurs 7 May | Eurozone retail sales; UK local elections | GBP political-risk catalyst |
| Fri 8 May | Canada jobs; US Non-Farm Payrolls | The week’s headline event |
NFP consensus sits around 130k–150k after March’s 178k surprise.
What this means for transfers
Sterling is firm against both the dollar and euro by 12-month standards — but the geopolitical risk premium can unwind quickly if Hormuz reopens. For larger transfers — property completions, business invoices, tuition fees — a forward contract or staged execution removes the timing risk a single binary print can otherwise impose.
Cambridge Currencies operates via FCA-authorised partners Currencycloud (FRN 900199) and ScioPay (FRN 927951). Every transfer is completed by phone with a dedicated specialist.
Request a quote or browse the currency forecasts hub for pair-by-pair outlooks.
Frequently Asked Questions
The MPC voted 8-1 to hold Bank Rate at 3.75% on 30 April 2026. Pill’s hike vote reflects upside inflation risks from the Iran-driven energy shock. Four other MPC members signalled they could support hikes if those risks intensify.
Three FOMC members opposed the statement’s easing bias, signalling they no longer expect the next move to be a cut. Combined with Powell’s departure on 15 May and Kevin Warsh’s likely confirmation as Chair, this has reduced market confidence that Fed cuts will resume — a moderate support for the dollar.
Money markets price approximately 93% odds of a 25-basis-point ECB hike at the June meeting. June hinges on whether energy-driven inflation produces second-round effects in wages and services prices.
Polling suggests significant losses for Labour, which could reintroduce UK political-risk premium if results raise speculation about a leadership challenge. A heavy defeat could see GBP/EUR retreat from current levels near 1.16; a softer-than-feared result would likely be neutral.
A forward contract is an agreement to exchange a fixed amount of one currency for another at a specified rate on a future date — typically up to 12 months ahead. It removes exchange-rate risk between booking and settlement.
