Societe Generale’s Kit Juckes notes that while US yields have risen sharply since the conflict with Iran, the Dollar’s appreciation has been relatively modest because rates have also increased elsewhere. Against this backdrop, the bank’s end-2026 GBP/USD forecast is set below Bloomberg consensus, implying a softer Pound (GBP) versus the US Dollar (USD) over the medium term.

Bank sees weaker Pound into 2026

"The war changed the interest rate outlook, with 2-year yields rising by over 6% since it started."

"That is because rates have risen elsewhere too, and while relative rates have moved in the dollar’s favour, they have only done so modestly."

"Even so, the trend (US 2-year yields rising faster than we are seeing elsewhere) is clear enough."

"The Bloomberg end-2026 DXY, EUR/USD and GBP/USD consensus forecasts are 96.7, 1.20 and 1.35 ."

"Ours are 98.6, 1.16 and 1.32."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)