Goldman Sachs upgrades GBP forecasts due to UK growth

Goldman Sachs has raised its forecasts for the British pound (GBP) against major currencies. The bank attributes this change to better-than-expected growth in the UK, economic stability, and lower exposure to US tariffs. Political stability and a strong services sector are also helping the pound. The bank now expects the GBP to perform better against the US dollar (USD) and worse against the euro (EUR) in the coming months. The new forecast for GBP/USD is 1.28 in three months, 1.32 in six months, and 1.35 in a year. For EUR/GBP, the forecast is 0.84 in three months, 0.83 in six months, and 0.82 in a year. Goldman Sachs highlights several factors supporting this outlook. UK services and labor markets are doing better than expected. Additionally, the UK government has communicated a responsible approach to defense spending, which has boosted investor confidence. The UK is less vulnerable to US tariffs compared to the Eurozone. This means the pound is less likely to be affected by tariff-related risks. Furthermore, the Bank of England is expected to manage interest rates cautiously, which could attract more investments to the UK. In conclusion, Goldman Sachs believes the pound is well-positioned for growth, especially against the euro, with its revised expectations signaling a stronger GBP going forward.