Gbpusd Will Decline Mufg

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Gbpusd Will Decline Mufg

Gbp/Usd Will Decline To 1.20 - Mufg

According to MUFG, the GBP/USD pair will decline towards 1.20. Once this happens, the pair will start its recovery phase and move higher.

For now, the GBP/USD is seen near 1.2500, which means the pair will lose around 500 pips this year. At least, that's what the MUFG analysts believe will happen in the year 2025.

MUFG added that the US Dollar will show its strength once again in the year 2025. As a result, the GBP/USD will decline to around 1.20 during Q1 2025.

Gbp/Usd Will Recover To 1.30

But once the GBP/USD drops to 1.20 support, it will stage a rebound and reach a high of 1.30. According to them, the 1.30 handle will be touched by the end of 2025.

The bank also added that the US administration will implement USD-bullish policies. Including tariffs & tax cuts, which will lead to the buying of USD in the short term. In fact, the policies will even force the Federal Reserve to temporarily pause the rate cuts.

They believe that GBP/USD has already started moving according to this forecast. This means we can't expect any strong gains in the short term.

The bank also commented on how the US economy will go through a slow patch in 2025. They believe the consumer spending in the USA will take a hit.

Given this context, the banks are expecting the rate cuts to continue, which will be the key reason for the Dollar reversal. They don't believe that any tariffs from the US government will pose any threats to the GBP. MUFG added that the BoE will actually have a more aggressive rate-cutting policy in the year 2025.

If we look at the markets, they are only expecting 2 more rate cuts in the year 2025. However, MUFG believes otherwise, as they are forecasting 4x rate cuts this year alone.

All of this supports a bullish GBP, similar to the forecast made by the MUFG. But before that, the bank believes that a correction is in order.

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