Politics will be a feature of the pound's Autumn. File image of Andy Burnham. Picture by Lauren Hurley / No 10 Downing Street.
The world's major investment banks are all locked onto lower levels from here.
Pound sterling looks overvalued against the euro and is vulnerable to a notable correction according to a survey of the world's major investment banks and financial institutions.
New data shows the consensus looks for the pound to fall against the euro into year-end and stay below current levels for the remainder of the forecast horizon that runs into 2027.
The median of the forecasts actually shows the pound is some 300 pips above where it can be expected to be by the turn of the year, suggesting it is well elevated relative to where economic models suggest the pound-to-euro rate should be.
The consensus forecast is derived from the rolling Bloomberg survey of close to 70 major banks. It is reserved to the Bloomberg terminal, but it is now available as part of an information pack issued by World Wide Currencies.
The pack can be requested free of obligation here.
The median forecast is particularly useful, as it provides those with future currency payments a credible anchor for their budgeting plans.
However, we also find that the variance in the forecast pack can be quite instructive: what are the highest and lowest calls? These often speak of the risks and opportunities inherent in the FX market and offer worst- and best-case scenarios for those with payment needs.
The latest pack from World Wide Currencies shows that the topside forecasts are actually close to where spot in GBP/EUR currently resides (1.17), suggesting to us that we're already looking at the more optimistic end of the scenario landscape.
Rather alarmingly, at least for those wanting to buy euros, the downside outlier is at 1.0753, a prediction that is more consistent with sterling levels during the various crises of the past decade.
To delve deeper, request your no-obligation forecast pack from World Wide Currencies.
