Goldman Pound To Dollar Forecast: Sell GBP/USD, 3-Month Target Is 1.33 - Exchange Rates Org UK

What the desk is arguing

Goldman's downgrade of the GBP/USD target to 1.33 reflects a growing concern over the pound's resilience amidst a potentially stronger dollar. Acceleration in U.S. economic recovery and tightening monetary policy from the Federal Reserve may undermine the pound, especially in the face of domestic uncertainties that could hinder the Bank of England's ability to maintain a competitive stance.

Further supporting this bearish view, recent revisions by Goldman's peers suggest a consensus that projects a relatively stable to strengthening dollar. Firms like JPMorgan and Morgan Stanley have updated their targets in alignment with this new pessimism for GBP, while the overall narrative is shaped by the widening rate divergence between the two economies. The implicit counterargument suggests that there could be factors propelling GBP higher, but current market conditions indicate a preference for a stronger dollar over the near term.

Where it sits in our coverage

Our consensus target for GBP/USD stands at 1.3500 for March 2026, indicating a range from 1.3300 to 1.3800 among firm predictions. This holds a notable divergence from Goldman's stance, suggesting a more bullish outlook when compared to their projected target, which sits on the lower end of our spread.

Specifically, we can see varied targets from other banks: - JPMorgan: Mar26 1.3700 - Morgan Stanley: Mar26 1.3800 - Bofa: Mar26 1.3400

How other firms see it

Many firms are projecting a mixed outlook on the pound, with a number aligned with Goldman's recent bearishness. Several banks hold views that suggest a less optimistic performance for GBP, particularly in the immediate horizon.

• Goldman: Mar26 1.3300
• Bofa: Mar26 1.3400
• MUFG: Mar26 1.3500

In contrast, firms like Morgan Stanley and Barclays seem to take a more positive stance, indicating stronger expectations with targets around or above 1.3500 for the same period. This divergence illustrates a nuanced debate within the market regarding the GBP's trajectory.