GBP/USD Forecast Gap Widens as Major Banks Clash

Two major banks, Goldman Sachs and UBS, have released their GBP/USD forecasts for 2027, revealing a significant gap between their predictions. According to the forecasts, Sterling is expected to slip towards 1.32, with Goldman predicting a value of 1.28 in twelve months' time, while UBS sees it reaching 1.41 by September 2027.

The difference between the two banks' projections amounts to thirteen cents, with Goldman's forecast sitting thirteen cents below UBS's target. This disparity is not surprising, given the differing views of the two banks on the direction of US monetary policy and its impact on the Dollar.

Goldman attributes recent strength in the Dollar to factors such as Federal Reserve follow-through, pressure from commodity prices, and higher yields. In contrast, UBS believes that investors have become overly aggressive in their expectations for further tightening by the Fed, and expects only one more rate hike.