**GBP to USD Forecast: Pound Sterling Weakens Amid Equity Selloff and Rising Safe-Haven Demand**
Original reporting by James McIntosh for CurrencyNews.co.uk (November 18, 2025)
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The Pound Sterling (GBP) has recently faced significant downward pressure against the US Dollar (USD) as global investors pivot toward safer assets amid substantial volatility in equity markets. Current macroeconomic conditions, political uncertainties, and renewed appetite for safe-haven currencies are playing critical roles in shaping the GBP/USD exchange rate. This article provides a comprehensive analysis of recent market movements, the underlying drivers impacting sterling, and the outlook for the pair in light of recent events.
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### Recent Performance of GBP/USD
Over the past week, the GBP/USD exchange rate demonstrated renewed vulnerability, with fresh selling momentum pushing the pair to multi-week lows. A resurgence in risk aversion triggered by a broad-based selloff in global equity indices proved to be the primary catalyst. The Dollar strengthened across the board, benefiting from its safe-haven status, while the pound faced mounting selling pressure.
– **GBP/USD declined below key support levels, settling near 1.2200 as of the most recent market session**
– **Market volatility heightened by geopolitical tensions and uncertain economic releases**
– **Sterling’s underperformance mirrored by declines against other major counterparts, including the euro and the Japanese yen**
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### Factors Pressuring Pound Sterling
Multiple elements have converged to weaken the UK currency:
#### 1. Flight to Safety Boosts US Dollar
The appetite for safer assets intensified as equity markets endured steep losses:
– Major global indices (FTSE 100, S&P 500, Euro Stoxx 50) registered sharp losses
– Investors sought refuge in the US Dollar, viewing US Treasuries and the greenback as secure holdings
– Demand for US Dollar liquidity soared, underpinning its broad-based strength against most rivals
#### 2. UK Economic Data Underwhelms
Recent UK macroeconomic releases have offered little support for sterling:
– Labour market data remained mixed, with headline unemployment ticking slightly higher and wage growth slowing
– Retail sales and consumer confidence indices pointed to persistent weakness in household spending
– Manufacturing and services PMIs indicated contraction or stagnant growth in key sectors
#### 3. Bank of England Cautious on Rate Cuts
Monetary policy expectations have also weighed on the pound:
– While investors initially speculated about potential Bank of England (BoE) rate cuts in the first half of 2025, policymakers have consistently signaled caution
– Minutes from the latest BoE meeting reflected concerns over inflation persistence and global economic headwinds
– US Federal Reserve messaging, in contrast, appears more hawkish, dampening relative yield prospects for the UK
#### 4. Political Uncertainty and Fiscal Challenges
Sterling sentiment has been further eroded by domestic and international developments:
– Ongoing political uncertainty in Westminster as a general election looms, with parties divided over fiscal strategy and EU relations
– Market skepticism remains over the UK government’s fiscal path, especially amid large budget deficits and spending pledges
– Brexit legacy issues and trade frictions with the European Union continue to deter investor confidence
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### Analysis of Technical Levels
From a technical perspective, GBP/USD faces considerable resistance and vulnerability at several key chart points:
– **Immediate resistance**: 1.2300 to 1.2350 region (previous consolidation area)
– **Initial support**: 1.2160, recent intraday low
– **Major support**: 1.2100, psychological round number and multi-week base
– **Momentum indicators**: Moving averages and Relative Strength Index (RSI) suggest downside momentum is intact, but the pair verges on oversold territory
Should the pair breach the 1.2100 support decisively, technical analysts warn of potential acceleration lower with mid-1.2000s as next targets. On the upside
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