Synopsis:

HSBC expects the UK economy to perform between the robust US and weaker eurozone, driving GBP/USD lower to 1.23 and EUR/GBP down to 0.80 by Q3 2025.

Key Points:

• GBP/USD Outlook:

  • Target: 1.23 by Q3 2025.
  • Driven by the UK economy's relative resilience amid global challenges but lagging behind US economic strength.

• EUR/GBP Outlook:

  • Target: 0.80 by Q3 2025.
  • Reflects the UK's stronger economic fundamentals compared to the eurozone.

Conclusion:

HSBC sees Sterling navigating between the US's economic strength and the eurozone's weakness, supporting a lower GBP/USD and EUR/GBP by late 2025.