Mufg Gbpusd Forecast

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Mufg Gbpusd Forecast

MUFG's Forecast: GBP/USD Will Hit 1.37 In 12 Months

The latest forecast from MUFG reveals that GBP/USD will be near 1.37 in the next 12 months. This is a bullish forecast when we look at the trading price of GBP/USD, which is in a medium-term bearish trend.

According to analysts, the equities market is under pressure, and it has hurt the appeal of the Pound. On the other hand, the geopolitical situation favours the US Dollar, and that's what we are seeing in the GBP/USD pair.

GBP To Strengthen In The Coming Months

But the 12-month forecast from the MUFG shows that GBP/USD will recover and hit a high of 1.37. The MUFG also noted that there's a high degree of uncertainty over the Fed's policy.

The bank thinks that the US Federal Reserve will introduce three rate cuts by the end of November 2026. So, that's the basis for this forecast, and the bank thinks it will affect the Dollar yield support.

As for the Bank of England, MUFG thinks that the next rate cut will likely be delayed but will eventually happen. They added that the BoE will likely go with just 1 more rate cut this year, and the interest rate will be near 3.25%.

Also, the UK's fiscal policy outlook will strengthen the GBP and help improve the investors' sentiment. But the biggest factor behind the GBP's strength will be the interest rate difference between the USD and the GBP.

The bottom line is that the US Federal Reserve is in a tough spot and will have to introduce multiple rate cuts. On the other hand, there will be just one more rate cut from the BoE in 2026.

If we look around, several other analysts also think that the US Dollar will lose ground against the GBP. In fact, the US Dollar is set to lose ground against most other currencies if the US Federal Reserve goes ahead with its rate cuts.

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