FX analysts at Crédit Agricole forecast the Pound Sterling at 1.31 vs US Dollar by December before a recovery to 1.39 in late 2027.
The British Pound to Dollar (GBP/USD) exchange rate ended Friday near 1.3517 after a volatile session driven by much stronger US employment data.
GBP/USD traded between 1.3489 and 1.3548, with the British Pound briefly testing a three-week low before recovering most of the initial decline.
The US economy added 162,000 jobs in August, compared with the latest survey estimate of 55,000, while unemployment held at 4.1%.
The result reinforced expectations that the Federal Reserve can keep interest rates higher and made Crédit Agricole’s near-term Sterling caution more relevant.
The 48-hour chart shows GBP/USD recovering from below 1.3490 but failing to regain the 1.3540-1.3550 area.
A break below 1.3480 would expose 1.3400, while 1.3550 is the immediate resistance level.
Crédit Agricole forecasts GBP/USD at 1.32 for September and 1.31 for December 2026.
The bank then expects a gradual recovery to 1.32 in March 2027, 1.34 in June, 1.37 in September and 1.39 by December 2027.
From Friday’s closing level, the December forecast implies Sterling losses of approximately 3.1%.
The projected subsequent rise from 1.31 to 1.39 would amount to a recovery of just over 6%.
Crédit Agricole said: “We maintain a cautious GBP/USD outlook from current levels that is consistent with our above-consensus view on the USD.”
It added: “The GBP could also remain a pressure valve for anxious market participants who fret about the impact of persistent stagflation risks on the UK economic and fiscal outlook.”
GBP/USD Forecast: Some Pound Sterling weakness already priced in
The bank does not expect the Pound’s problems to continue indefinitely.
Crédit Agricole said: “We also believe however that some negatives are already priced into the GBP especially vs the EUR, given that the Eurozone would have to deal with the consequences from the negative oil supply shock in the wake of the Iran war as well.”
The analysts added: “We further note that the GBP is already looking oversold while global investors seem underinvested in UK assets.”
Friday’s payroll surprise supports the initial move towards 1.32 and 1.31, but the longer forecast depends on the Dollar losing momentum during 2027.
The recent warning that Sterling remained overbought also supports a cautious near-term view.
For GBP/USD 1.3480 is the first test. Holding that level would preserve consolidation around 1.35, while a clear break would make Crédit Agricole’s 1.32 September forecast increasingly credible.
Our currency coverage draws on live market data, official economic releases and published bank research.
