GBPEUR at 1.1498has fallen 0.6% below its 90-day average, range 1.1385-1.1774.
British Pound Sterling to Euro forecasts
Sterling started 2021 strongly against the euro trading at its best levels since April/May last year, after the resolution of Brexit and good vaccine roll-out numbers in the UK.
The pound strength has hit a snag in April on concerns relating to AstraZeneca shot – which the U.K. is heavily dependent on – while the euro has strengthened on good immunisation numbers coming out of the eurozone earlier than expected.
Saxo Bank see EUR/GBP lower in the short-term (next few months) but higher by the end of the year once the chaotic vaccine roll-out on the continent is finally sorted out.
The pound hit its highest level since April 2018 against the US dollar on the final day of 2020, as markets were optimistic after the UK parliament’s approval of Britain’s post-Brexit trade deal.
ING have upgraded their sterling to euro end-2021 forecast from GBP/EUR 1.13 to 1.18 (EUR/GBP 0.88 to 0.85). They predict with the risk of a ‘no deal’ Brexit out of the way, sterling will reap the benefits of a faster vaccination rollout in the UK relative to the eurozone.
Further out ING see GBP/EUR at 1.17 (EUR/GBP at 0.85) in the second half of this year and GBP/EUR at 1.22 (EUR/GBP at 0.82) by the end of 2022.
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.
Whether the euro will rise or drop in the future against the pound is a difficult question and the answer really depends on many factors. The best way to consider the current GBP-EUR relative value is to check the change in the exchange over a range of periods to the present day. The below table does this for periods going back 10 years.
30 Apr 2021
07 Apr 2021
06 Feb 2021
07 May 2020
08 May 2016
10 May 2011
GBP/EUR 10 year historic rates & change to 07-May-2021 : 1.1499
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