Forecasts for EUR to GBP
The EUR to GBP exchange rate recently traded near 30-day lows at 0.8394, reflecting a 0.5% decline from its 3-month average of 0.8441. This relatively stable range has seen fluctuations between 0.8246 and 0.8683 over the past three months. Analysts note that the euro (EUR) has been supported by a general weakness in the US dollar (USD), countering some impacts of potential interest rate cuts from the European Central Bank (ECB), which have capped stronger gains.
Looking to the Eurozone, the upcoming release of the manufacturing and services PMIs is expected to show improvements in private sector growth, which could provide additional support for the euro and its performance against the pound (GBP). However, political tensions, including the ongoing conflict in Ukraine and associated economic sanctions, remain pivotal influences, adding layers of uncertainty to the euro's stability.
In contrast, the GBP has recently experienced a spike due to an acceleration in UK inflation figures; however, economists caution that underlying factors are mostly one-off, and this surge may not influence the Bank of England's (BoE) policy significantly. According to currency market experts, the GBP may face downward pressure in light of expected contractions in the UK private sector, as indicated by forthcoming PMI reports.
Additionally, recent developments such as the announcement of a 10% tariff on UK goods by the US and ongoing trade tensions under the Trump administration may further influence sterling's stability. The market is observing how these tariffs, alongside broader trade relationships, will affect the UK's economic outlook and the GBP's value.
With oil priced at 64.78 USD—4.8% below its 3-month average of 68.05—market volatility persists and could have repercussions on the euro, which is sensitive to global oil prices. Experts indicate that the correlation between oil prices and the euro’s value remains significant, as energy costs are a critical factor for the Eurozone economy.
Overall, currency markets remain cautious, and both EUR and GBP are subject to a variety of influences, including macroeconomic trends, geopolitical developments, and commodity price movements that could shape their trajectories in the coming weeks. Investors are advised to remain vigilant, closely monitoring these factors as they develop.
