Pound Forecasts against Euro and Dollar Marked Down at Bank of America - Pound Sterling Live

What the desk is arguing

Bank of America is cutting its forecasts for the pound, citing persistent economic pressures that are undermining the currency's strength. The shift comes as analysts reassess the economic landscape, particularly regarding inflation and interest rate trajectories, which have direct implications for the pound's value against key currencies like the euro and dollar.

This decision implies that Bank of America is taking a more pessimistic view than previously held, likely driven by economic indicators signaling a slowdown. In light of recent Bank of England announcements and macroeconomic data, the implicit counterfactual rejected is the notion that supportive fiscal or monetary measures could reverse the pound's fortunes anytime soon.

Where it sits in our coverage

Currently, our consensus target for the GBP/USD is 1.075 with a target range between 1.04 and 1.12. This view diverges from Bank of America's revised estimates, which lean towards a weaker outlook for the pound, underlining a bearish sentiment toward the currency's near-term prospects.

Among our coverage, specific firms have varying outlooks for the pound. For instance:

• JPMorgan: 1.10 target, Mar26
• Barclays: 1.08 target, Mar26
• Goldman Sachs: 1.06 target, Mar26

How other firms see it

Several firms appear to align with our consensus target, supporting a more stable outlook for the pound despite Bank of America's downgrade. For example, JPMorgan maintains a bullish stance, in contrast to BofA's pessimistic view.

• JPMorgan: aligned with a target of 1.10
• Barclays: aligned with a target of 1.08
• Goldman Sachs: has a more cautious view but remains within the broader range.

In summary, while Bank of America takes a notably bearish stance towards the pound, other firms continue to support a more optimistic outlook based on differing economic assessments.