Goldman Sachs Gbpeur Bearish

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Goldman Sachs Gbpeur Bearish

Goldman Sachs: Gbp/Eur To Remain Bearish In 2026

The Goldman Sachs forecast for the GBP/EUR pair reveals it will decline to 1.11 over the next 12 months. The overall forecast is bearish for the pair as the bank believes the Pound is overvalued.

quick look at the GBP/EUR shows that it is currently trading way above the 1.11 level. This is a sign that, despite the short-term strength of the GBP, the currency will eventually lose out in the long run.

Pound Is Overvalued

According to Goldman Sachs, the UK fundamentals will remain weak, which will eventually make the Pound overvalued. Meanwhile, the conditions in the Eurozone will improve, which will prop up the shared currency.

They also added that the Pound will have to face short covering in the next few quarters. On top of that, the inflation, interest rate, and the BoE policy will also push the GBP lower.

The bank has also raised its forecast for the UK's 2026 GDP by a little bit. But despite the upgraded forecast, Goldman Sachs believes that the UK economy will underperform when compared with other major economies.

Also, the Bank of England will increase its pace of rate cuts in the year 2026. Meanwhile, the European Central Bank is highly likely to maintain the interest rate levels, which means no rate cuts at all.

So, as far as the interest rate is concerned, Goldman Sachs is expecting the BoE to introduce more rate cuts, while the ECB will not offer any rate cuts at all.

This fact alone tells us that the odds will turn in favor of the EUR while the GBP will go through a period of selling. In fact, other fundamentals also show that the Euro will do much better over the next 12 months as compared to the Pound.

The bottom line is that Pound has gotten ahead of itself, while the fundamentals don't support a stronger Pound at all.

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