GBP/EUR Longterm forecasts - Currency markets are increasingly optimistic about the pound after the resolution of Brexit and good vaccine roll-out in the UK.
Forecasts Updated: Jul 19, 2021
EUR/GBP – closed on Friday in New York at 0.8577 (0.8545 close a week ago). EUR/GBP hit a weekly peak at 0.8597 which was a week ago. Weekly low traded was at 0.8503 on Thursday following the release of weaker-than-expected UK PPI Input and Output data. EUR/GBP steadily climbed to its 0.8577 finish on Friday.
GBP to EUR at 1.1698is 0.6% above its 90-day average, range 1.1487-1.1730.
British Pound Sterling to Euro forecasts
The pound’s direction will be determined by any positive or negative headlines around the potential full reopening of the economy in England.
GBP/USD – closed the week at 1.4160 (1.4210 last week). The Fed’s hawkish shift hit the Pound hard, pushing it 1.6% lower in 2 days. GBP Forecasts
The topside of the EUR/USD is now limited to 1.2000 and the risk is for a move to the next support at 1.1700. EUR 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.
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.
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.
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