GBPEUR Rate Outlook: Could Sterling See Further Gains Over the Euro?

GBP EUR Higher After European Central Bank Rates

The pound to euro exchange rate has traded in tighter range over these last few days as investors monitor coronavirus developments in the UK and EU. The UK is expected to extend the lockdown by three weeks later today following in France’s footsteps. The British lockdown is expected to remain until 7th May and there is hope that the peak in the number of reported deaths will be approaching soon. Germany on the other hand has announced some easing of lockdown measures including some non-essential shops to reopen.

Could GBP Continue its Gains Over EUR?

Bloomberg has reported that the pound could end up being a winner against the euro for two main reasons. Firstly, it is clear that pressures within the EU on how to handle the coronavirus are building, crucially relating to how the debt burden will be managed and ultimately paid for. In all comes down to money and whether the EU collectively will pay the bill or whether it is down to individual nations. Whilst a plan has been agreed to provide funds for countries to rebuild their economies, the details of this crucial question on who pays is less clear.

Steve barrow from Standard Bank has said “We’ve long had our sights on a return to 0.80 over the coming year for euro-sterling but now we are starting to think that this may be too conservative. This is good news for those looking to buy Euros with pounds.

Economic Data to Affect GBPEUR Exchange Rates

This morning sees the release of EU industrial production numbers ahead of inflation numbers tomorrow. The International Monetary Fund will also be meeting tomorrow and any forecasts or statements may have an impact on GBP vs EUR exchange rates.

It is next week’s data which is likely to be more significant for GBP to EUR rates with UK unemployment numbers released on Tuesday. These cover the month of March which is when the governments lockdown began. Unemployment is expected to rise considerably so any deviation from initial forecasts could see market reaction for GBP vs EUR. Those looking to buy or sell Euros would be wise to consider planning around these data releases and all the latest Covid-19 developments as any major shift in outlook could see a significant market reaction as we have seen in recent weeks.

If you’d like to discuss these factors and how they could impact an upcoming currency transfer, feel free to get in touch with me, James Lovick, using the form below.