Deutsche Bank
FX Blueprint 2026: The Great Rotation
LIVE12 December 2025USD bearish
Back to CurrenciesBullish
GBP/USD
Capital rotation beneficiary
DB Forecast Path
Cross-Firm Forecast Comparison
Key Drivers
Capital rotation
Fiscal clarity
BoE policy
Growth resilience
EUR/GBP dynamics
All Firm Targets (Dec '26)
MSStrongly Bullish1.4700
DBBullish1.4200
BARCBullish1.4100
MUFGModerately Bullish1.4000
BofABullish1.4000
JPMTactically Bullish1.3600
GSModerately Bullish1.3600
INGModerately Bullish1.3600
Key Issues for 2026
1.UK assets attract rotation capital
2.Fiscal clarity post-budget
3.BoE hawkish relative to G10
4.Growth resilience supports carry
5.GBP/EUR to remain range-bound as both strengthen vs USD
Risk Scenarios
Bullish1.45+
UK growth accelerates, capital inflows surge
Base case1.40-1.42
Steady rotation, gradual BoE easing
Bearish1.28-1.30
Fiscal concerns, growth slowdown, BoE cuts aggressively
Analysis Summary
GBP benefits from the Great Rotation as UK assets attract capital. Fiscal clarity, resilient growth, and BoE's hawkish stance support sterling. GBP/USD 1.42 reflects broad USD weakness plus GBP-specific strength.