Gbpusd Forecast Scotiabank

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Gbpusd Forecast Scotiabank

GBP/USD Will Touch 1.37 By 2027 - Scotiabank

Scotiabank has issued a bullish forecast for the GBP/USD. According to the forecast, the GBP/USD pair will be near 1.37 by early 2027.

When we look at the current trading levels of GBP/USD, it becomes clear that the bank is bullish on the GBP. This also means Scotiabank believes the US Dollar is overvalued and will lose its value in the coming months.

The US Dollar Is Overvalued By 1-2%

The bank also highlighted that uncertainty remains high in the short to medium term. This will prove to be bad news for the US Dollar and ultimately send the GBP/USD pair higher.

Scotiabank added that the US Dollar is broadly overvalued by 1-2% standard deviation. So, it is only a matter of time for the USD to trend lower. This also highlights that any upside in the US Dollar will remain limited.

The high geopolitical tension and high energy prices are also something that will drag the USD lower. Also, the interest rate difference is something that also goes against the US Dollar.

In the short-term, we might see some spikes in the US Dollar. But in the medium to long-term, the path of least resistance for GBP/USD is upwards.

Scotiabank also commented that the US Federal Reserve is set to introduce two more rate cuts in 2026. So, the higher US yields will also become a thing of the past, and it will eventually undermine the US currency.

In fact, the GBP will not just be the only currency that is set to benefit from this weakness in the US Dollar. Other currencies such as the Euro, JPY, and AUD also stand to gain from the changes in the interest rate policy.

Some analysts think the US Federal Reserve might not go ahead with rate cuts. But in reality, the Federal Reserve doesn't have much room to keep the rates steady.

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