The British pound to euro exchange rate (GBP/EUR) slipped from the best conversion levels seen in three months last Thursday due to average UK data and improved sentiment towards the single currency. We examine the latest forex forecasts for the pound sterling, euro, US dollar and the Australian dollar for the next week.
Following a stronger-than-forecast GfK Consumer Confidence Survey the British pound to euro exchange rate returned to a more bullish footing, something sterling also achieved against many of its other rivals such as the Australian and US dollars.
Friday's winners included the GBP/AUD with a 0.3 per cent rise, the GBP/EUR spot rate also with a 0.3% rise, however the GBP/USD fell after the latest US GDP printed as forecast.
Foreign exchange investors were largely encouraged by this sign of improved domestic sentiment, while the Euro (EUR) exchange rates fell out of favour thanks to a resurgent US Dollar (USD).
The sterling-euro cross soared to a best of 1.3215 during the first half of the week as ‘Brexit’ bets plummeted, but during Thursday’s session the pair trickled lower.
The GBP/EUR exchange rate fell by almost 0.3 per cent on Thursday after the day’s British data was released.
Key sterling cross related events in the coming week's forex calendar include:
- The GBP to AUD exchange rate's events: Aussie Building Approvals (source), GDP, Retail Sales and Trade Balance.
- The sterling/euro exchange rate's events include: UK Manufacturing PMI (source), Eurozone Minimum Bid Rate, ECB Press Conference (source), and the UK Services PMI.
- The pound to dollar's events include the CB Consumer Confidence, ADP Non-Farm Employment Change, US Unemployment Claims, US Crude Oil Inventories, Average Hourly Earnings, NFP, Unemployment Rate and finally the ISM Non-Manufacturing PMI.
Other Pound Sterling / Currency Exchange News
Latest Pound/Euro Exchange Rates
On Saturday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.862
The GBP to EUR exchange rate converts at 1.16 today.
FX markets see the pound vs us dollar exchange rate converting at 1.237.
The GBP to AUD exchange rate converts at 1.928 today.
The pound conversion rate (against canadian dollar) is quoted at 1.701 CAD/GBP.
Today finds the pound to swiss franc spot exchange rate priced at 1.126.
NB: the forex rates mentioned above, revised as of 20th 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 Sterling (GBP) Exchange Rates Hold Ground Despite Dent from Mixed Data
The Pound exchange rates have enjoyed considerable support in the past week.
With less than a month until June’s key EU referendum vote, Sterling’s volatility increased but the currency was able to gain against most majors (including the Euro) due to strengthening debates and results from ‘Remain’ campaigns.
Sterling initially resisted many would-be weights and dents, such as news that the Bank of England (BoE) could cut rates even if the UK chose to stay in the EU, but its rally seemingly ended on Thursday.
Britain’s Key preliminary Q1 Gross Domestic Product (GDP) printed largely as expected, with growth staying steady at 0.4% quarter-on-quarter. However, the yearly score disappointed by slipping from the expected 2.1% to 2.0%.
BBA’s latest loans for house purchase report underwhelmed investors when it revealed a drop from 43,854 to 40,104, despite being expected to improve to 44,700. Business investment also disappointed by slipping from 3.0% to a contraction of -0.4% year-on-year.
Euro (EUR) Exchange Rates Buoyed by Improvement in Eurozone Sentiment
Despite a lack of key Eurozone data released since Wednesday, the euro exchange rates actually managed to begin a recovery against the bullish Pound over the course of Thursday’s session as markets reacted favourably towards new agreements on Greece’s debt relief crisis.
While some analysts believe the new deal ‘breakthroughs’ are merely compromises to stall for time, the Euro was still able to gain slightly as a result of the news.
Reuters reports;
Euro zone governments on Wednesday offered Greece debt relief in 2018, but left key details for later in a bid to bridge Germany's view that no immediate action was needed and the International Monetary Fund's call for decisions now.
The late-night compromise spared the battered European Union the risk of another Greek crisis this year, less than 12 months after Athens was on the brink of ejection from the currency area by rejecting austerity measures and defaulting on an IMF loan.
Pound to Euro Exchange Rate Forecast: Will Sterling Drop Below 1.31?
With most of the key data for Britain and the Eurozone now released for the week, Friday’s session could end with GBP to EUR exchange rate well up from the previous week’s levels.
As ‘Brexit’ debates rage on, it’s possible that a strong argument from the ‘Leave’ campaign following Thursday’s ONS release of migration figures could weigh down the Pound further.
However, unless this happens alongside a worse-than-expected score from GfK’s UK consumer confidence survey (expected to slip from -3 to -4), the Pound is unlikely to drop considerably.
Friday sees only relatively light Eurozone data due for release, including Italian consumer confidence and business confidence.
Pound to Dollar Exchange Rate Forecast
Scotiabank highlight the GBP/USD exchange rate's inability to breach the key 1.47 level:
"The 1.47 handle seems a big figure too far for the plucky pound at the moment (or perhaps just ahead of the long weekend)."
"Despite a clear sense that the UK EU referendum campaign is more likely to end in a vote to stay, based mainly (it has to be said) on the fact that UK bookmakers have shortened their odds on the remain camp prevailing, the GBP has failed to sustain gains through the 1.47 area this week."
Reuters, also comment on the reduded odds of an "In":
"British bookmaker William Hill said on Monday it was offering an "In" vote at the shortest odds since the date of next month's referendum on European Union membership was announced in February."
Australian Dollar (AUD) Outlook vs Pound Sterling (GBP)
Citibank analysts warn of a limitation in the current pound to Aus dollar exchange rate uptrend:
"GBP’s upside may be capped: Investors may be concerns about the potential impact in UK economy if Brexit."
"Australia raised Capex estimates: The future estimate of Capex for 2016/17 financial year has been raised from AUD82.6B to AUD89.2B."
"RBA’s rate cut expectation is easing: The growing expectation of rate hike by the Fed and the recent decline in AUD may ease rate cut expectation, which may support AUD."