The pound to US dollar exchange rate keeps climbing right now, and it’s making quite a statement as growing doubts about dollar strength emerge from Wall Street. At the time of writing, the GBPUSD pair has reached three-year highs near 1.3600, and investment banks are questioning whether this represents a sustained trend shift in favor of Sterling over the greenback.

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Why GBPUSD Is Rising as UK Strength Meets Dollar Doubts

The pound to US dollar rate pulled back to around 1.3480 on Wednesday after hitting those multi-year peaks, but analysts remain optimistic about Sterling’s prospects. This retreat came after contrasting confidence surveys initially supported dollar recovery, though strategists aren’t convinced about sustained greenback strength, and many are revising their GBPUSD forecast accordingly.

Technical Outlook Supports Continued Pound Strength

Scotiabank remains bullish on the pound to US dollar pair, and their Chief FX strategist Shaun Osborne had this to say about the current trend:

“The trend for GBPUSD is bullish, given the sequence of higher lows and higher highs, as well as the recent push to fresh multiyear highs.”

He also added:

“We look to near-term support at 1.35 and near-term resistance at 1.36.”

The technical picture suggests the recent dip below 1.3500 remains within established parameters, and Bank of England policy expectations have stayed relatively stable with markets pricing minimal easing ahead. This stability continues supporting the overall GBPUSD forecast.

US Data Fuels Dollar Weakness Concerns

Mixed American economic signals continue supporting the case for dollar weakness, and this benefits the pound to US dollar exchange rate. Consumer confidence jumped to 98.0 from 85.7 in May, beating forecasts of 87.1, but underlying concerns persist about the labor market.

Stephanie Guichard, Senior Economist at The Conference Board, stated:

“The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards.”

She also noted some concerning trends:

“However, while consumers were more positive about current business conditions than last month, their appraisal of current job availability weakened for the fifth consecutive month.”

US durable goods orders declined 6.3% for April, though this came in better than the expected 7.6% drop. Still, analysts believe more substantial improvements will be needed to reverse underlying dollar weakness trends, and Wall Street dollar doubts continue growing.

UK Challenges Don’t Derail Sterling Momentum

Despite some domestic headwinds, UK inflation data and broader economic momentum continue supporting Sterling’s appeal against the US dollar. The CBI retail sales index dropped to -27 for May from -8 in April, with further declines expected for June.

CBI lead Economist Ben Jones commented on the retail sector challenges:

“This was a fairly downbeat survey and highlights some of the challenges facing the retail and wider distribution sector. In contrast to other recent retail data, this survey suggests parts of the sector are still struggling with fragile consumer demand.”

Even with these concerns, the pound to US dollar rate maintains its upward bias as investors weigh UK economic resilience against American fiscal and trade uncertainties.

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Trade Policy Uncertainty Amplifies Dollar Doubts

Wall Street’s dollar doubts have intensified amid ongoing trade policy volatility, particularly after President Trump’s reversal of threatened EU tariffs. This uncertainty continues benefiting the GBPUSD forecast as investors seek alternatives to dollar exposure.

Commerzbank FX analyst Michael Pfister warned about upcoming volatility:

“One thing should be clear after Friday’s announcement: the brief respite from tariffs that we enjoyed was only temporary. We are likely to face more turbulent days and weeks ahead precisely because the 90-day suspension of higher reciprocal tariffs is coming to an end.”

Danske Bank analysts remain bearish on the greenback, expressing their view that fiscal concerns, trade policy uncertainty, and a fragile global risk environment could continue eroding the dollar’s appeal. This backdrop supports continued strength in the pound to US dollar rate, and many traders are positioning for further gains as Wall Street dollar doubts persist.