Gbp To Stay Bearish Goldman

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Gbp To Stay Bearish Goldman

Gbp To Stay Bearish In 2026 - Goldman Sachs

According to Goldman Sachs' forecast, the GBP will continue to move lower against the USD and the EUR. So, this forecast suggests that the risk is skewed to the downside for the Pound Sterling.

The key reason why the GBP will stay under pressure is due to the dovish signals from the Bank of England. The commentary from the BoE suggests that we can expect more rate cuts in 2026.

Boe To Introduce 3 Rate Cuts In 2026

In fact, Goldman Sachs believes that the BoE will introduce rate cuts at a much faster rate than the market expectations. So, it's only natural for the GBP to move lower as fast rate cuts will shock the markets.

Goldman Sachs added that at least 3 more rate cuts from the BoE will happen in 2026. This will move the terminal rate in the UK to around 3%.

The bank also believes the growth rate and inflation rate in the UK will fall short of the BoE's forecasts. So, the BoE will have no choice but to go ahead with policy easing.

They also commented on how the GBP is still very highly cyclical. So, while the GBP is holding its own for now, it will not last for much longer.

Also, the policy asymmetry and the overall trajectory of data suggest that GBP continues to face downside risks in the medium to long term.

Looking ahead, the data coming from the UK will also not offer any support to the Pound Sterling. On top of that, the UK government policies will also lean towards controlling inflation and the economy as opposed to making the currency stronger.

Based on the market data and the upcoming rate cuts, Goldman Sachs suggests that exposure to the GBP should be limited. The Pound Sterling is set to lose ground against the US Dollar and the Euro.

Instead, Goldman Sachs suggests that market players should look at other currencies like NOK and SEK to get better positioning.

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