GBP to EUR Forecast & Outlook
In the near term, GBP/EUR is trading close to the 90-day average and supported by the rate differential, but is facing downside pressure owing to risk-off conditions. The pair is consolidating within its recent range, with the dominant driver remaining the relative rate cuts between the BoE and ECB. Current risk conditions, with safe havens preferred, suggest the pair may remain supported at these levels but could face pressure if risk sentiment worsens further.
Transfer implications
- Expats: sending money to Euro countries may find conversion rates less favourable than recent levels if GBP weakens.
- Travellers: buying Euro cash or top-ups could see slightly less advantageous exchange rates, especially if the pair continues trending downward.
- Businesses: paying Euro invoices in GBP might face higher costs if the pair drops further, reflecting a weaker GBP.
Key drivers
- Rate gap: The BoE’s slower easing cycle versus the ECB’s rate hike expectations maintains the pair near recent highs.
- Risk/commodities: Risk-off sentiment supports safe-havens, pressuring risk-sensitive currencies like GBP.
- Global factors: Geopolitical tensions and energy shocks, with natural gas prices up 70%, threaten EUR stability and influence the pair.
What could change it
- Upside risk: A potential easing of risk-off conditions or better UK economic data could support GBP strength.
- Downside risk: Further escalation in geopolitical tensions or worsening energy prices could deepen GBP weakness.
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Forecast summary
- GBP/EUR outlook: DOWN
- Outlook display: Likely to fall
- Medium-term: Likely to rise
- Expected range: 1.1390–1.1600
- Key driver: interest-rate differentials
