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Sterling to dip before year-end rally, UBS predicts
The British pound is no stranger to change and volatility! Currently, the GBP/USD pair is experiencing a short-term decline after a recent spike. According to analysts at UBS, the currency pair is expected to see a brief dip before potentially rallying towards the end of the year.
Currency strategists at the bank have highlighted the stabilization of the British bond market following the volatility observed earlier in 2025. According to analysts, the current calm in the market has shifted focus to new risks, primarily the imposition of US tariffs. They believe that this could influence global sentiment and the dynamics of the pound sterling, given its cyclical nature.
Despite ongoing concerns, European currencies have gained momentum, bolstered by recent fiscal spending news from the region. This has strengthened the pound, contributing to its rally to the key $1.3000 level. This mark serves as significant resistance, while $1.2500 remains a crucial support zone.
UBS analysts acknowledge that the $1.3000 barrier could be breached. However, in the near term, the GBP/USD pair is expected to fall again, largely weighed down by the new US tariffs set to take effect in early April. The bank forecasts that the currency pair could dip to $1.2600 before rallying to $1.3100 by the end of 2025.
The bank predicts a decline for the pound in the first half of this year, followed by a rebound in the second half. According to its forecast for March 2026, the GBP/USD pair could reach $1.3100 by the end of 2025. Experts recommend using the upcoming dips as an opportunity to reduce dollar exposure and prepare for potential growth.
© InstaFintech Group
