British Pound To Euro Exchange Rate Forecast: Best GBP/EUR Conversion Unlikely As Sterling To Face Brexit Test

Foreign exchange investors find the British pound to euro rate hovering close to recent six-year lows as the new trading week concludes its first full day. We examine the latest euro-related fx forecasts targeting the sterling and the US dollar in the short, medium and long-term GBP/EUR forex outlooks

  • The British Pound to Euro exchange rate today (24-10-16 – foreign exchange markets reopen): +0.07pct at 1.12376, best monthly rate was 1.1866.
  • The Euro to Pound Sterling exchange rate today: -0.07% at 0.88987.
  • The Euro to Dollar exchange rate today: -0.06% at 1.08734.
  • GBP/EUR, GBP/USD conversations start the new week with little movement either way.
  • Pound Forecast: Sterling-Dollar Range Vulnerable to 3Q GDP Reports, BoE and Fed Rhetoric

GBP/EUR continued to trend largely flatly on Monday afternoon, as the morning’s Euro zone stats failed to give the shared currency any considerable bullishness.

Demand for the Euro continued to be weighed down by expectations of extended European Central Bank (ECB) easing in December, while the Pound was able to hold last week’s highs due to a lack of direction in Sterling trade throughout the day.

It was something of a mixed bag for the British Pound on Monday morning, with the CBI industrial trends orders index unexpectedly weakening from -5 to -17 in October.

This was contrasted by a significant uptick in the business optimism index for the fourth quarter, leaving the GBP/EUR exchange rate on a narrow trend.

Brexit-based worries could boost the Euro against the Pound Sterling this week, particularly as the latest UK growth data is expected to point towards weakness.

Foreign exchange markets reacted dramatically to comments from European Central Bank (ECB) President Mario Draghi, who generally tended towards a more dovish tone on monetary policy.

With the odds still on for an extension of the quantitative easing program to come in December the Euro (EUR) was prompted to weaken across the board.

This largely muted the impact of some disappointing UK data, setting the Euro to Pound Sterling (EUR/GBP) exchange rate on a downtrend heading into the weekend.

Related British Pound Headlines

  • Where your holiday pound goes further: Venezuela, anyone? – Financial Times
  • Pound value drops below $1.22 as May faces tough opposition at EU summit – The Independent
  • Britain’s sliding pound reflects a devalued economy – Financial Times
  • FTSE 100 skids and pound hovers above $1.22 as UK public finances worsen in September –

Latest Pound/Euro Exchange Rates

On Tuesday the Pound to Euro exchange rate (GBP/EUR) converts at 1.192

The euro conversion rate (against pound) is quoted at 0.839 GBP/EUR.

The EUR to USD exchange rate converts at 1.039 today.

The EUR to INR exchange rate converts at 70.505 today.

The EUR to CHF exchange rate converts at 1.068 today.

Please note: the FX rates above, updated 20th Dec 2016, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.

British Pound’s Outlook Looks Bearish as UK GDP Predicted to Fall Short

The appeal of the Pound is expected to weaken further over the coming week, though, with forecasts pointing towards a softening of growth in the UK’s third quarter GDP report.

This GDP data will be the first major gauge of the domestic economy’s health in the wake of the Brexit vote, offering a clearer picture of conditions than earlier PMI figures.

Growth is expected to have slipped from 0.7% to 0.3% on the quarter, a result which is likely to diminish Pound demand despite this indicating that the economy avoided recession at this juncture.

Should the GDP results better forecasts, however, investors could be encouraged to pile back into Sterling and put the EUR/GBP exchange rate under renewed pressure as a result.

Stronger German Inflation Predicted to Shore up Euro Exchange

RatesThe single currency could be pushed higher at the start of the week, with the latest raft of Eurozone PMIs expected to show improvement on the month for October.

This would suggest that the domestic economy remains in a more robust state, although the appeal of the Euro could still be hampered by increased bets of an imminent Federal Reserve interest rate hike.

Another source of EUR/GBP exchange rate volatility will be Germany’s October Consumer Price Index data, which could boost the Euro if inflationary pressure within the Eurozone’s powerhouse economy is shown to have strengthened further.

Pound to Euro Exchange Rate Forecast

GBP/EUR Exchange Rate Could Move to Fresh 2008 Lows

Lloyds analysts suggest the GBP/EUR exchange rate could be set to tumble towards 2008 lows in the near to medium term outlooks:

“Longer term, aligned with GBP, USD we are wary that another move to test the 0.9802 highs setback in 2008 can’t be ruled out and we are monitoring medium-term price action to confirm whether this will be the case, or whether 0.97 was a lower high within a broad range.”

In the longer term the outlook for the Euro is still less-than-bullish, with confidence in the resilience of the Eurozone likely to be increasingly tested.

As Brian Marin, Head of Global Economics at ANZ, noted:

“There are elections planned in the Netherlands, France, and Germany, and if Italian PM Renzi fails in the 4 December referendum – which opinion polls suggest he will – there may be an election in Italy. The question of European integration given economic underperformance, immigration, Brexit, etc., all suggest some political risk premium for the euro and an overreliance on easy monetary policy for growth.”

This could see the EUR/GBP exchange rate become increasingly vulnerable, especially if market concerns over the issue of Brexit begin to ease a bit more.

Other Pound Sterling / Currency Exchange News

  • Brexit Fallout: British Pound To Euro And Dollar Exchange Rates Predicted To CRASH On Scottish Independence
  • Today’s Hard-Brexit Food Price Warnings Leave Pound To Dollar Exchange Rate Vulnerable To Further Losses
  • Eurozone Data Releases To Dominate This Week’s Pound To Euro Exchange Rate Movement
  • Pound To Australian Dollar: The GBPAUD Exchange Rate Forecast For The Coming Week
  • Pound To New Zealand Dollar Forecast: Will GBP/NZD Exchange Rate Recover From Yellen Inspired Slump?
  • 5 Day British Pound To Dollar Rate Forecast: Are GBP/USD Predictions For Parity A Reality?
  • British Pound To Euro Exchange Ratew Forecast: GBP/EUR Predictions For New Week
  • US Dollar To Canadian Dollar Rate Forecast To Extend Gains On Slowing CAD GDP
  • The Euro To US Dollar Rate Heads Towards Pre-Brexit Levels
  • Pound Euro Exchange Rate Forecast: GBP/EUR Rallies Strongly As UK Retail Sales Rise

Euro to Dollar Exchange Rate Forecast

EURUSD managed a brief pop higher yesterday but gains barely extended through the low 1.10 area before the underlying bear tone reasserted itself” notes Shaun Osborne, Chief FX Strategist for Scotiabank.

“Renewed losses today below 1.0915 put spot on track for a test of the final Fibonacci support (1.0794) ahead of a full retracement back to the late 2015 low at 1.0542.”

“Spot is trading a little above the intraday low but we see little prospect of a deeper rebound at the moment as trend signals align bearishly on the short, medium and longer term studies and imply a sustained push lower is developing.”

Aurelija Augulyte’s latest currency exchange analysis report forecasts a fall in the EUR/USD:

Draghi’s words caused some volatility in financial markets, but in the end the message left too many open questions to trigger new trends in asset prices.”

“In the near future, the main direction for Euro-area bond markets will come from US and UK developments, which means some more upside pressure on yields.”

“Also the EUR/USD is set to take its guidance from global developments rather than the ECB outlook in the near term, with the “risk off” most likely bringing it lower.”

Lloyds suggest a period of consolidation could be seen in the euro to dollar exchange rate’s near-term outlook:

“EURUSD ended Friday, at its lowest level since mid-March. While above key support at 1.0800-1.0750, there is scope for some consolidation, particularly as momentum studies are relatively stretched.”