Pound Sterling exchange rates have firmed this week, but Goldman Sachs expects Pound-Dollar to slip back to 1.33 in three months and 1.28 in twelve months from around 1.35 now.
Pound Sterling is ending the week on a firmer footing, but Goldman Sachs is looking through that strength.
In its latest forecast table, Goldman projects Pound to Dollar (GBP/USD) at 1.33 in three months and 1.28 in twelve months, compared with a spot level around 1.35.
That is not a dramatic collapse call, but it is a clear message that the bank does not expect recent gains to hold.
The timing is notable.
GBP/USD has strengthened over the past 48 hours and was trading near 1.3551 on Thursday afternoon, its highest level of the month so far.
Pound Sterling is also up 0.77% against the Dollar on a year-to-date basis.
The short-term performance chart shows Sterling pulling ahead against the Dollar over the past two days, while GBP/EUR has been much flatter.
That leaves Goldman leaning against the immediate move.
The call also stands out because it comes after a period in which Sterling has looked relatively resilient.
Over the past three months, GBP/EUR has outperformed GBP/USD, with the broader Sterling complex looking firmer against the Euro than against the Dollar.
Three-month price action shows Sterling holding a steadier uptrend against the Euro, while gains against the Dollar have been less consistent.
The more interesting point is where Goldman sits relative to the wider market.
The broader bank-consensus range for GBP/USD still centres around the mid-1.30s through much of the forecast horizon, while the longer-dated range stretches both higher and lower.
Goldman’s 1.28 twelve-month target therefore looks distinctly cautious rather than middle-of-the-road.
The broader consensus remains relatively clustered around the mid-1.30s, making Goldman’s 12-month 1.28 forecast look more bearish on Sterling than much of the field.
Pound Sterling Outlook: Is GBP Strength Starting to Look Overextended?
That may be the real hook for Sterling watchers.
Positioning concerns tend to matter most when a currency has been behaving well enough to attract conviction, yet not well enough to justify complacency.
Cable near 1.35 can still look respectable on the screen while offering less margin for error if the Dollar regains support.
Goldman’s three-month forecast of 1.33 suggests it sees a modest retreat rather than an abrupt reversal.
The one-year call of 1.28 is more striking. It implies that the bank expects Sterling’s recent resilience to fade and the Dollar to do more of the work again.
For now, the Pound Sterling still has momentum. Goldman’s view is that it may not keep it.
Our currency coverage draws on live market data, official economic releases and published bank research.
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