Introduction to the Pound Sterling to Dollar Forecast
The Pound to US Dollar exchange rate (GBP/USD) has seen a significant surge on Monday, January 12, 2026, after news broke out about an investigation involving the Chair of the Federal Reserve. This news has had a profound impact on the US Dollar, causing it to plummet. At the time of writing, the GBP/USD exchange rate was hovering around $1.3465, marking a 0.5% increase from the opening levels on Monday.
The Reason Behind the US Dollar’s Decline
The US Dollar came under sharp pressure following reports that Federal Reserve Chair Jerome Powell is the subject of a criminal investigation by the US Department of Justice. The probe is reportedly related to Powell’s testimony to Congress regarding the Federal Reserve’s $2.5 billion headquarters refurbishment project. In response to the investigation, Powell released a statement claiming that the probe is politically motivated and aimed at influencing the central bank’s interest rate decisions.
Impact on the Pound and US Dollar
Despite benefiting from a weaker US Dollar, the Pound struggled to generate broader momentum on Monday. The Pound underperformed against several other major currencies, owing to signs that UK business confidence deteriorated toward the end of 2025. Surveys from KPMG and the Recruitment and Employment Confederation pointed to a marked drop in sentiment, with firms scaling back hiring plans in response to rising costs and persistent uncertainty.
The Future of the GBP/USD Exchange Rate
Looking ahead, the Pound to US Dollar exchange rate may continue to build on its gains as attention turns to the latest US inflation data. If December’s consumer price index confirms a further easing in price pressures, it could reinforce dovish expectations within the Federal Reserve and encourage markets to bring forward bets on the next US rate cut, potentially extending losses in the US Dollar. With little in the way of major UK economic releases scheduled, Sterling is likely to continue taking its cues from developments in the US and shifts in broader market sentiment.
How to Save on Your GBP/USD Transfer
When transferring money internationally, it’s essential to get the best exchange rates to maximize your savings. By comparing rates and fees, you can save up to 5% on your money transfers compared to high street banks. Consider using a reputable currency transfer service to get the best rates and lower fees on your next international money transfer.
Conclusion
In conclusion, the Pound to US Dollar exchange rate has seen a significant surge due to the investigation involving the Federal Reserve Chair. The US Dollar’s decline has benefited the Pound, but the UK currency still faces challenges due to declining business confidence. As the market awaits the latest US inflation data, the GBP/USD exchange rate may continue to fluctuate. It’s crucial to stay informed and consider using a reputable currency transfer service to get the best exchange rates and lower fees on your international money transfers.
