Pound to euro rate forecast: How will the pound to euro rate react for the rest of this week?

GBP USD Exchange Rate Edges Away From 21-Month Lows

The pound to euro rate has been volatile as investors react to the results of the all-important European elections which took place over the weekend.

European elections, the impact on the pound to euro rate

Investors are still digesting the news but essentially, all the predicted ‘shifts’ in electoral behaviour rang true. There was a noticeable shift in the make up of the European Parliament which has seen the euro fractionally weaken. Also, the rise of the Brexit party has seen sterling weaken too.

Looking forward, the GBP/EUR exchange rate seems destined to be dictated by politics for the foreseeable future, as investors seek to better understand what lies ahead. And there is plenty to discuss, with the prospect of a general election, second referendum and potentially even a Scottish independence vote again too.

Pound to euro forecast

The outlook for the political situation seems destined to remain very unclear with the Conservative Party leader election getting underway with now ten candidates having thrown their hats into the ring.

I expect sterling will remain on the backfoot as investors seek to assess where the fortunes for the UK government will turn next, the resignation from Mrs May has removed one uncertainty but created plenty more.

The euro too looks like it will struggle with the more extreme parties gaining traction, this could present many opportunities for euro buyers, if sterling can capitalise. There has been a fear that the more extreme parties would be capitalising on the recent malaise in European politics but so far this has not manifested itself as much as many had feared.

Clients with a transfer to buy or sell euros against pounds will find volatility ahead on both sides of the channel, I would not be surprised to see the pound lose more ground depending on what the outcomes are from the Conservative Party leadership contest.

If you have a transfer to consider and wish to learn more, please do not hesitate to contact me Jonathan Watson to discuss further.