Gbpusd Will Move Lower Uob

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Gbpusd Will Move Lower Uob

GBP/USD Will Target 1.27 By End 2026

According to UoB, the GBP/USD pair will reach 1.27 by the end of 2026. This is a bearish forecast for the GBP and shows that the US Dollar will remain strong in the next few quarters.

UoB also added that both central banks will go through multiple rate cuts in 2026. So, the Bank of England and the Federal Reserve will cut the rates in 2026.

No Big Moves In GBP/USD Pair

As both central banks will cut rates, it will limit any big moves in the GBP/USD pair. However, they think that the pair will move higher and reach 1.37 by the end of 2027.

For now, there is no evidence of short covering for the Pound Sterling. But in November 2025, these positions were at 10Y highs.

They also added that the UK government has removed a big part of the fiscal uncertainty. So, that will continue to support the Pound, but it will not be enough to support the GBP against the USD.

If we look around, most of the analysts and investment banks have forecasted a weaker US Dollar in 2026. Meanwhile, this forecast from UoB hints at a stronger USD in the case of the GBP/USD pair.

Back in December 2025, the BoE went ahead with 0.25% rate cut, and UoB believes that two more will come during 1H2026.

So, this continuation of the rate cuts from the BoE will undermine the yield of the Pound against the US Dollar.

As for the US Federal Reserve, UoB has forecasted two more rate cuts in the year 2026. So, it would take the interest rate down in the USA to near 3.25%.

However, a major risk for the US Dollar is the selection of a new Fed chair. If the new chairman changes the policy and increases the pace of rate cuts, it could change the course of GBP/USD.

So, if the Fed gets a dovish chairman, then the era of lower rates in the USA would start. It will fuel growth for sure, but would also send inflation higher.

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