Pound Sterling (GBP) may begin to weaken in March, according to an FX analyst. The GBP/USD exchange rate is unlikely to maintain gains above 1.26.
This week, UK Prime Minister Starmer is set to meet Trump in Washington, which could generate positive press due to the UK’s commitment to increase defence spending by 2027. The market perceives the UK as relatively resilient amid trade tensions, with short-term risks for EUR/GBP potentially leaning downwards.
The outlook remains focused on a lower GBP/USD, casting doubt on the currency’s ability to retain its current levels.
The suggestion that the pound could weaken in March is not without reason. If GBP/USD struggles to maintain a position above 1.26, traders may begin adjusting their strategies accordingly. A lower exchange rate raises concerns about the sustainability of recent strength, particularly if market conditions do not provide fresh support.
Keir’s meeting with Donald has the potential to steer sentiment, especially due to the pledge to boost defence spending by 2027. The optics of such a trip matter – reaffirming ties with the US at a time when global trade tensions remain high could benefit Britain’s perception as a steady partner. But while this may foster some short-term confidence in sterling, it does not necessarily counterbalance the broader pressure leaning towards a weaker GBP/USD.
In contrast, those watching EUR/GBP may have noted that near-term risks remain skewed to the downside. If the pound retains some resilience against the euro, it could offer relief for those positioned accordingly. However, this does not change the bigger trend—caution remains warranted regarding sterling’s overall trajectory.
Given recent market conditions, traders should remain aware of these dynamics. If GBP/USD begins to slip, it might reinforce the idea that sterling’s current position is unsustainable. Without new drivers of strength, a drift lower could be the more natural path.
