Goldman Sachs Pound To Euro Forecast: GBP/EUR Tipped At 1.11 In 12 Months - Exchange Rates Org UK
Goldman Sachs has issued a bullish forecast for the GBP/EUR pair, projecting a target of 1.11 within the next twelve months. This outlook suggests a strengthening of the British pound against the euro, which could be driven by several macroeconomic factors and shifts in monetary policy. The bank appears optimistic about the UK's economic trajectory compared to the Eurozone, anticipating that current trends will favor the GBP.
What the desk is arguing
Goldman Sachs is anticipating a bullish outlook for GBP/EUR, predicting that it will reach 1.11 within the next year. This projection hinges on the bank's belief in a recovery in the UK's economic resilience and a potential divergence in monetary policy between the Bank of England and the European Central Bank.
Supporting this thesis, Goldman points to factors such as improving economic indicators in the UK and anticipated interest rate changes that may further strengthen the pound. The bank is implicitly rejecting a more bearish outlook, which suggests that Eurozone economic stagnation could weigh heavily on the euro against a recovering GBP.
Where it sits in our coverage
Our current consensus target for GBP/EUR is 1.075, with a tight firm spread between 1.04 and 1.12, placing us somewhat lower than Goldman’s prediction. This divergence suggests a more cautious stance from our analysis compared to Goldman’s optimistic view.
Several other firms have offered their perspectives on GBP/EUR targets as well, including:
- JPMorgan: Target of 1.10 by March 2026.
- Barclays: Target of 1.08 by March 2026.
- Goldman Sachs: Target of 1.11 by December 2024.
How other firms see it
In contrast to Goldman, BofA holds a bearish view, with a target of 1.04 for March 2026, reflecting concerns over the UK’s ongoing economic challenges. On the other hand, firms like JPMorgan and Barclays are somewhat aligned with Goldman’s optimism, but they do not fully embrace the same level of bullishness.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Goldman Sachs projects GBP/EUR to reach 1.11 in 12 months.
- 02The forecast suggests stronger UK economic recovery compared to the Eurozone.
- 03Current divergence with our consensus target of 1.075 reflects differing views on economic conditions.
Market implications
If GBP continues to strengthen as Goldman predicts, this could lead to adjustments in market positioning and capital flows, particularly from investors looking to capitalize on currency movements. Additionally, a rising GBP could impact UK exporters due to potential reduced competitiveness in pricing overseas.
Risks to this view
Key risks to Goldman’s forecast include unexpected economic downturns in the UK, changes in monetary policy that do not favor the GBP, and continued geopolitical tensions that could affect investor sentiment. A stronger-than-expected Eurozone recovery could also pose risks to GBP gains.
Sources & References
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