UBS Pound To Dollar Forecast: Buy GBP/USD 1.40 Option Call - Exchange Rates Org UK

What the desk is arguing

UBS's recommendation to buy the GBP/USD 1.40 option call suggests a strong bullish sentiment for the British pound. Market expectations are shifting, as the consensus among banks points toward a notable appreciation of GBP against USD, driven by a favorable economic outlook and potential policy adjustments.

The desk's thesis is supported by recent revisions from multiple banks, indicating a median target of 1.3500 for March 2026 with a range suggesting further gains to 1.4000 by December 2026. This aligns with UBS's bullish position and reflects increasing market confidence in the GBP's recovery prospects against the dollar.

Where it sits in our coverage

Currently, our consensus target for GBP/USD sits at 1.3500 for March 2026, reflecting a narrow range from 1.3300 to 1.3800. This outlook is consistent with UBS's call for the option, and it highlights a general market expectation of upward momentum for the pound as key economic indicators begin to favor the UK economy.

Specific firm targets for December 2026 reinforce this optimistic sentiment:

• JPMorgan: 1.3600
• MorganStanley: 1.4700
• DeutscheBank: 1.4200

How other firms see it

Several firms agree with UBS's bullish view on the pound, aligning their forecasts with a generally optimistic outlook for GBP/USD.

• Goldman: This firm also projects GBP/USD to 1.3600 by December 2026.
• MorganStanley: A more aggressive target of 1.4700 reflects a strong case for pound appreciation.
• Barclays: Targets of 1.4100 by December indicate a significant bullish sentiment.

In contrast, BofA holds a more cautious stance, projecting a lower target of 1.4000, suggesting some doubts about the pound's ability to sustain stronger gains amid broader USD strength.