GBP to EUR Forecasts
The pound to euro exchange rate direction is being driven by the energy crisis and the lingering impact of the pandemic on full reopening of the economies in England and the Eurozone.
BER ResearchGBP/EUR Outlook
The BoE’s (UK central bank) gloomy economic forecasts has increased pressure on Sterling. In early May the pound plummeted when the BoE raised rates by just 25bps contrasting with the rate hike of 50bps by the US Federal Reserve.
| Date | GBP/EUR | Change | Period |
|---|---|---|---|
06 May 2022 | 1.1700 | 1.1% ▲ | 2 Week |
19 Feb 2022 | 1.2007 | 1.5% ▼ | 3 Month |
20 May 2021 | 1.1602 | 1.9% ▲ | 1 Year |
21 May 2017 | 1.1613 | 1.8% ▲ | 5 Year |
22 May 2012 | 1.2407 | 4.7% ▼ | 10 Year |
25 May 2002 | 1.5813 | 25.2% ▼ | 20 Year |
Factors that affect the British Pound Sterling to Euro exchange rate
Tensions between Russia and the US over Ukraine also continue to be a source of volatility hurting both the pound and euro given both zones reliance on Russian gas.
The pound hit a 3-Year LOW in mid May near 1.22 against the greenback (1 USD = 0.81 GBP) — on the bleak outlook for the UK economy and after the Federal Reserve started its long anticipated increase of interest rates.
Also hanging over the head of the pound is the thread of a EU-UK trade war over Brexit.
At the start of the tragic Russian invasion of Ukraine the euro sank to parity against the safe-haven Swiss franc hitting 0.9985 francs per euro on March 7th, the lowest since January 2015.
By the end of April the euro fell to a 5-Year low around 1.05 against the US dollar and the short term news for the single currency is all negative. Global bans against Russian oil and gas and uncertainty over ECB interest rate plans have prompted predictions in the currency markets for parity for the euro against the greenback this year.
A risk-off market mood always favours the safe-haven Euro over the riskier Pound.
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 2021.
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Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.