Today's Pound Sterling to Euro Exchange Rate Forecast with Live GBP/EUR Predictions for 2015-2016
Foreign exchange markets saw the British Pound to Euro exchange rate recover as last week concluded, after the ECB revised its forecasts.
It has been a rather varied week for the Euro (EUR) and a conclusively more unimpressive one for the Pound, with a raft of fresh data releases from both the UK and the Eurozone.
German Retail Sales for July proved less negative than had been anticipated, with the figure posting at 3.3% instead of 1.7%, on Monday to start the GBP-EUR exchange rate on a persistent downtrend.
Adding to the strength of the common currency was a better-than-forecast Eurozone Inflation Rate, which remained at 0.2% rather than dropping to 0.1% as traders had expected.
A varied week for the two currencies saw the Pound to Euro (GBP/EUR) exchange rate push fresh lows
A quick foreign exchange market summary before we bring you the rest of the report:
On Thursday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
The GBP to GBP exchange rate converts at 1 today.
FX markets see the pound vs swiss franc exchange rate converting at 1.141.
The GBP to USD exchange rate converts at 1.251 today.
NB: the forex rates mentioned above, revised as of 25th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
Pound to Euro Exchange Rate Forecast
Stock markets returned to the red on Tuesday following more poor data from China, a development to the detriment of the Pound Sterling to euro (GBP/EUR) exchange rate pair as traders returned to the relative security of the Euro in the desire for a safe-haven.
Although Eurozone Manufacturing PMIs were also generally weak, with the pointed exception of Germany, these were soon overshadowed as the currency union’s Unemployment Rate was shown to have fallen to its lowest level in three years.
Repeated UK PMI Shortfalls Kept Pound Weak as ECB Talked Down Euro
A three-day run of underperformance on the UK’s PMIs weighed heavily on Sterling through the middle of the week, with the Manufacturing, Construction and Services figures all failing to meet forecasts. However, in spite of the most significantly disappointing performance coming on Thursday’s Services PMI – which declined from 57.4 to 55.6 – the GBP/EUR exchange rate remained above the three-month low of 1.3523.
While the Pound would remain decidedly bearish due to a lack of domestic data heading into the weekend, the GBP/EUR pairing was substantially boosted on Thursday thanks to statements from the European Central Bank (ECB) President Mario Draghi. Keen to talk the strong Euro down, Draghi discouraged traders with references to potential upcoming quantitative easing measures in a move that pushed the currency down across the board. Even though the GBP/EUR exchange rate quickly jumped to 1.3737 these gains were not especially long-lived as sentiment was re-evaluated.
Potential Market Turmoil to Benefit Common Currency and Weigh on GBP-EUR Exchange Rate
With risk aversion potentially on the rise once more as China’s stock markets reopen on Monday after a brief holiday the Euro could experience further strengthening, in spite of Draghi’s best efforts. Although significant local data will be thinner on the ground in the coming days either the upcoming second quarter Eurozone GDP or German Consumer Price Index data could prove to be sufficient fuel to drive up demand for the single currency. Below forecast numbers, however, may well undermine the Euro more substantially to bolster the GBP/EUR conversion pairing.
GBP-EUR Exchange Rate Forecast - Looking to Gain on Upcoming UK Trade Balance and BoE Data
Although it seems unlikely that traders will be quick to forget this week’s raft of poor UK PMIS, or the doubts they have raised as to the current recovery of the domestic economy, the Pound may still have the chance to rally on upcoming data.
Should the UK Visible Trade Balance or Industrial and Manufacturing Production figures come in strongly the GBP/EUR exchange rate could well receive a boost.
Also of note will be the Bank of England (BoE) 12 Month Inflation forecast for the insight it may offer into the state of the UK economy and the sentiment of the Monetary Policy Committee (MPC).
Pound Sterling to Euro Update:
Over the past few weeks the Pound Euro exchange rate has lost around six cents. See euro exchange rate history.
Whether or not the pairing's downtrend continues depends on how upcoming UK data prints.
Should British reports help bring Bank of England (BoE) interest rate hike projections forward again, GBP could recoup some of its losses against EUR. Today's Eurozone Sentix Investor Confidence index will also be of interest.
Today's GBP/EUR Outlook
The Euro fell against a number of its rivals as the Eurozone Sentix Investor Confidence index dropped dramatically in response to the turmoil in China.
Today EUR to INR, GBP, USD exchange rate movement could occur in response to the Eurozone's second quarter growth data.
A worse-than-forecast result would weigh on the common currency in the hours ahead.