GBPEUR Exchange Rate Forecast: Pound-Euro Rates Remain at Higher Ranges but for How Long?

GBPEUR Exchange Rate Forecast: Pound-Euro Rates Remain at Higher Ranges but for How Long?

Sterling to euro exchange rates remain trading at some of the higher points of the last month with the GBPEUR interbank rated currently sitting at 1.1450. The highest point in the last month reached was 1.1527 and the lowest 1.1146. The pound has made a solid recovery from the March 19th low of 1.0533 which is good to see for Euro buyers.

Part of this recovery is down to euro weakness but also some fresh optimism for the UK and how it had been responding to the Coronavirus with an extensive emergency plan by both the UK government and also the Bank of England.

For today, we have a series of key economic data releases including the latest European Central Bank (ECB) Interest Rate decision but also Eurozone Gross Domestic Product (GDP) data. The euro has been benefitting from some improved outlook on the Coronavirus with many signs of restrictions being eased in Europe, plus positive drug trials for the virus.

Could Today’s News See the Pound Fall Further Against the Euro?

The pound could also lose ground against a stronger euro if the ECB are upbeat in their assessments of the latest progress being made in Europe. Spain, Italy and France are all taking positive steps towards ending the lockdowns and allowing freer movement of people.

This might be compared to the UK which has a very high number of deaths and cases and is still behind Europe in its fight against COVID-19. It might be argued that if the Eurozone gets through the difficult times quicker than the UK, the euro might rise against the pound.

There are still many challenges ahead for the Eurozone of course, and today’s ECB meeting will provide a real snapshot of the latest views and commentary from the President of the ECB, Christine Lagarde. It has been made clear that the central bank remains very much committed to increasing its asset purchases, or Quantitative Easing (QE) programs if necessary. QE is the purchase of government bonds by a central bank to provide liquidity in the financial system.

QE can see a currency weaker, and if the ECB discuss the possibility of extending the current trillion Euro QE packages, or lowering interest rates, then we might well see some increased volatility on the euro.

If you have a transfer to buy or sell pounds or US dollars and wish to better understand future events that might change exchanges rates, please do get in touch directly with me to discuss further.