Morgan Stanley Warns of Sterling’s Decline in 2025

Morgan Stanley has delivered a critical forecast for the GBP/USD exchange rate, predicting a significant reversal in sterling’s dominance against the US dollar over the coming year. The investment bank cites several underlying factors driving this prediction, including a shift in interest rate differentials and a growing realization that the UK’s economic resilience may be fading. This analysis comes as currency markets are highly sensitive to central bank actions and unexpected economic data releases. 2025 marks a turning point where the current sterling surge is likely to fade, presenting significant opportunities and risks for forex traders.