Pound to Euro Exchange rates forecast: Will GBP/EUR rise or fall this week?

Pound to Euro Exchange Rate: Euro Looks to Edge Over GBP as Coronavirus Ups the Pressure on Sterling

Lack of Brexit clarity keeps GBP/EUR rates volatile

The pound to euro exchange rate has been oscillating in a fairly tight range as the lack of clarity on key issues, forces the market to avoid making any big bets. Currently, the market is eagerly seeking some clarity on Brexit, to find out which way sterling will trend. The euro has been fractionally weaker in the last week, as investors await further news on possible shifts in sentiment relating to whether or not the ECB (European Central Bank) will be looking to cut interest rates or launch further economic stimulus.

What might happen to the pound to euro exchange rate?

I believe sterling rates against the euro could fall lower into the 1.11’s as the prospect of a no-deal Brexit looms large. I expect sterling will continue to suffer in the months and weeks ahead, as investors become fearful over the lack of clarity. There have been many suggestions that if Boris wins the job of PM, which seems very likely, then there could be a vote of no confidence in the Government early on in his premiership.

This might be used by Conservative MP’s who do not wish to see a no-deal Brexit, and by toppling Boris, they might be able to encourage either some cross-party consensus, or even some form of ‘anti no-deal’ coalition.

Economic data out this week that may affect GBP/EUR rates

For the rest of this week the key point will be UK GDP (Gross domestic Product) on Friday, which will provide some further insight into how the UK economy is performing. The end of the week is also key for the euro, which could be under some pressure too with the release of the latest UK Inflation data.

From my research it appears that there could be more reasons to suspect sterling weakness, simply because the market seems to have been more fearful over the UK’s problems than Europe’s, hence why the level is lower. It is my personal opinion that I expect GBP/EUR rates to be trading between 1.10-1.13 based on what I can currently see ahead.

If you would like to learn more on factors affecting GBP/EUR exchange rates or have an upcoming currency transfer, feel free to contact myself (Jonathan) directly using the form below.