Gbp To Move Lower Hsbc

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Gbp To Move Lower Hsbc

Pound Sterling (Gbp) To Reach 1.25 In 2025 - Hsbc

HSBC has issued a new forecast for the GBP/USD and set a price target of 1.2500. Right now, GBP/USD is near 1.3340, which is the 30-month high, and appears to be in consolidation.

The recent rate cuts by the US Federal Reserve have provided a boost to the Pound. However, HSBC believes that these gains are not sustainable at all as the UK faces a fundamental vulnerability.

Uk Economy Faces Major Account Deficit

HSBC also added that the US Dollar's resilience will send the GBP/USD towards the 1.25 by the end of 2025. In fact, HSBC has also challenged the arguments given by analysts in support of the bullish GBP.

HSBC believes that the Fed's rate cuts will not damage the US Dollar. They added that the rate cuts will be gradual, which will actually improve the optimism increase the chances of a soft landing.

Also, any increased chances of a recession in the USA will also increase the USD demand. So, as far as the theory of the US Dollar is concerned, HSBC doesn't believe any of it.

As for the economic situation in the Eurozone and China, HSBC believes that money will not flow out of the USA and into these economies.

One particular case is the UK, which has a major current account deficit. This gap is filled by volatile inflows of short-term nature as compared to robust inflows.

Given all of that, the Pound (GBP) appears to be vulnerable against the US Dollar as the global risk appetite will take a hit.

All of these developments are not exactly bullish for the GBP. That's why it makes sense for HSBC to issue a bearish forecast for the GBP, which is against popular opinion.

The other party talks about bullish GBP on account of a resilient economy and the fact that the UK will not face harsh tariffs from the new US government.

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