The coronavirus pandemic has replaced Brexit in the headlines for 2020 which is favourable for GBP.
GBP will rise to 1.20 per euro according to Standard Bank. The coronavirus pandemic means that the deadline for a trade deal this year could either be pushed back, delaying a risk for the currency, or see more favorable terms given to the U.K.
US dollar weakness has helped the embattled British pound continue its recovery off June and early July lows. Despite this brief upturn, the outlook remains pessimistic as Brexit uncertainty and questions over the economy’s ability to rebound after the pandemic weigh on the currency. August Currency Update
The GBP to EUR exchange rate jumped to 1.19 in early February when Mark Carney – in his final press conference as Governor of the BoE – stated: “The UK economic performance has not been so far so good, but so far good enough. Although the global economy looks to be recovering, caution is warranted” and “Evidence of a pick-up in growth is not yet widespread.”
Note that forecasts and predictions for the GBP/EUR exchange rate change all the time, affected by news events and relative sentiment towards the UK and Eurozone economies and this exchange rate is even more volatile than usual because of the uncertainties around Brexit.
You can read more about GBP cross-rate forecasts here GBP Trends and Forecasts for 2020.
This is a difficult question and the answer really depends on many factors. The best way to consider an exchange rate's relative value is to look at the rate's history.
The following table looks at the change in the GBP to EUR exchange rate to the present day for periods going back upto 10 years:
|06 Aug 2020 : 1.1063||0% ▼||1 Week|
|14 Jul 2020 : 1.1016||0.4% ▲||30 Days|
|15 May 2020 : 1.1187||1.1% ▼||90 Days|
|14 Aug 2019 : 1.0823||2.2% ▲||1 Year|
|15 Aug 2015 : 1.4083||21.5% ▼||5 Years|
|16 Aug 2010 : 1.2197||9.3% ▼||10 Years|
GBP/EUR 10 year historic rates & change to 13-Aug-2020 : 1.1059
The euro is currently a more appealing investment than the US dollar as fiscal support and COVID-19 containment open the door to a faster paced recovery than what is likely in the US. With current USD weakness and strong long-term prospects for the European Union, there is speculation that the euro could be a contender as the world’s new reserve currency. In the short term the euro could be susceptible to swings, however in the longterm the euro has very good prospects. The currency is poised to move above 1.1850 and extend toward 1.20 in coming weeks.
In mid-July euro strengthened four-month highs (around 1.15 against the US dollar) as european leaders delivered a difficult agreement on a coronavirus rescue package to help member states manage the economic downturn. The historic stimulus package will see the bloc issue 750 billion euros (US$860 billion) of joint debt and is seen by market commentators as positive for the euro.
The Euro spent 2019 on a downwards trajectory, starting the year with highs at US1.1550 but then slid all year until October where it bottomed out at US$1.09 on Oct 1, close to long-term lows. Since then it has climbed back over the 1 year average of US1.11 towards US1.15.