CitiGroup Pound To Dollar Forecast: Risk Of GBP/USD Retreat To 1.29 - Exchange Rates Org UK

What the desk is arguing

CitiGroup's outlook on GBP/USD indicates a pessimistic shift, warning of a possible decline to 1.29 as macroeconomic pressures mount. This sentiment aligns with broader market concerns regarding the UK's economic recovery and the ongoing impact of monetary policy divergences.

Such a forecast represents a stark contrast to prevailing market consensus, suggesting heightened risks for traders positioned long in GBP/USD. If the cable does retreat, it could be a signal for broader bearish sentiment against the pound.

Where it sits in our coverage

Our consensus target for GBP/USD currently stands at 1.3500 for March 2026, with a range spanning from 1.3300 to 1.3800. This view is more optimistic than CitiGroup's forecast, indicating that many firms are more confident in the pound's resilience than CitiGroup currently suggests.

Specific firm targets for December 2026 include: - JPMorgan: 1.3600 - MorganStanley: 1.4700 - DeutscheBank: 1.4200

How other firms see it

Goldman and ING appear to share a relatively cautious stance, though their targets remain above CitiGroup's prediction. They advocate for a more tempered approach toward GBP/USD, albeit with a slight cushion above the 1.29 level.

Overall, the diverging outlooks among firms such as MorganStanley and JPMorgan, who maintain robust targets for GBP/USD, further illustrate the varying perspectives on the currency's stability in the face of economic uncertainties.