The British Pound has outperformed most major currencies in recent weeks, and analysts at Lloyds believe the combination of improving UK economic data and optimism surrounding the incoming Burnham government could keep Sterling supported through the summer.
The Pound to Dollar exchange rate (GBP/USD) traded near 1.35, while the Pound to Euro exchange rate (GBP/EUR) held close to its best levels of 2026.
Pound to Dollar (GBP/USD): 1.345377 (-0.17%)
Euro to Dollar (EUR/USD): 1.143775 (-0.06%)
Dollar to Yen (USD/JPY): 162.4012 (+0.01%)
Lloyds: Pound Sterling’s Recovery Has Solid Foundations
Lloyds says Sterling’s recent strength has been driven by more than just takeover flows into UK companies.
“Sterling’s recent outperformance… has developed some legs.”
The bank argues that markets have welcomed the political transition to Andy Burnham, hoping his popularity and economic advisers can deliver a more credible long-term growth agenda.
At the same time, the UK economy has proved “more resilient (and less inflationary) to the Iran energy shock” than many expected, with stronger GDP, improving consumer spending and signs the labour market has stabilised.
Lloyds also notes that elevated household savings and relatively low private-sector leverage leave the UK better placed than many European peers to absorb higher energy costs.
Near-Term Pound Forecast: Lloyds Favours GBP Versus the Euro, But Is More Cautious on the Dollar
While Lloyds sees scope for further Pound gains against the Euro over the summer, it is less optimistic about Sterling’s prospects against the US Dollar.
The bank argues that Europe’s economy has been more exposed to the effects of the Iran conflict, creating room for further GBP/EUR outperformance, with EUR/GBP potentially retracing towards the lower end of its longer-term trading range.
However, Lloyds believes outperforming the Dollar will be much harder.
“It is harder to see a sustained outperformance of GBP versus the US dollar.”
The bank points to stronger US growth, continued AI-driven investment and a Federal Reserve that still appears more hawkish than the Bank of England.
Lloyds also warns that Sterling’s political tailwinds may prove temporary, with difficult fiscal decisions awaiting the new government in the autumn Budget.
Pound Sterling Prices: This Week
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.20% | -0.36% | +0.43% | -0.97% | -0.40% | -1.36% | -0.12% | |
| EUR | +0.20% | -0.16% | +0.64% | -0.77% | -0.20% | -1.16% | +0.08% | |
| GBP | +0.36% | +0.16% | +0.80% | -0.61% | -0.04% | -1.00% | +0.24% | |
| JPY | -0.43% | -0.63% | -0.79% | -1.39% | -0.83% | -1.78% | -0.55% | |
| CAD | +0.98% | +0.77% | +0.61% | +1.41% | +0.58% | -0.40% | +0.85% | |
| AUD | +0.40% | +0.20% | +0.04% | +0.83% | -0.57% | -0.97% | +0.28% | |
| NZD | +1.38% | +1.17% | +1.01% | +1.82% | +0.40% | +0.97% | +1.25% | |
| CHF | +0.12% | -0.08% | -0.24% | +0.56% | -0.85% | -0.28% | -1.24% |
The FX heat map compares how Pound Sterling (GBP) has performed against a basket of major currencies over the past week. The largest move was against the New Zealand Dollar, where Pound Sterling recorded its sharpest decline. Data comparing prices today (18/07/2026 06:09 UTC) and daily close on 11/07/2026.
To read the table, choose the base currency from the left-hand column and then move across to the quote currency along the top row. For example, the GBP row and USD column shows the weekly percentage move in GBP/USD.
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