HSBC Pound To Dollar Forecast 2025: GBP, USD Under Threat, 1.37 By 2026 - Exchange Rates Org UK

What the desk is arguing

HSBC anticipates a strengthening of the GBP against the USD, forecasting a rise to 1.37 by 2026. This opinion reflects concerns about the economic pressures both currencies will likely face, including inflationary pressures and shifting interest rates.

The rationale behind this forecast includes the expectation of continued UK economic recovery balanced against potential dollar strength undermined by the Federal Reserve's dilemma regarding interest rate policies. HSBC seems to reject a more pessimistic scenario, which would have GBP/USD trapped below current levels even in light of improving UK fundamentals.

Where it sits in our coverage

Our current consensus target for GBP/USD is 1.075, with a firm spread of 0.08, reflecting a more conservative view than HSBC's bullish outlook. This divergence highlights that while some banks are forecasting a significant rebound for the pound, we maintain a cautious stance based on macroeconomic indicators such as inflation and output growth.

• Barclays: Projecting GBP/USD at 1.10 by Dec-26.
• JPMorgan: Targeting 1.09 by Dec-26.
• Goldman Sachs: Maintaining a target of 1.05 by Dec-26.

How other firms see it

In contrast to HSBC's outlook, several firms have a more restrained perspective regarding the GBP's recovery against the dollar.

• BNP Paribas: Maintains a skeptical view with a target of 1.04, highlighting potential headwinds for the UK economy.
• BofA: Also contrary to HSBC, assigning a target of 1.06 amidst expected dollar strength due to economic resilience in the US. This grouping suggests that not all analysts share the optimism reflected in HSBC's projections.