Will the pound rise further against the Euro? GBPEUR Forecast

Politics has been a big driver on GBPEUR particularly with the Brexit vote and its impact on sterling. However the next few weeks will I believe see economic factors play a much bigger role and some big moves could happen as early as 4th August when the Bank of England meet to discuss their latest interest rate decision. They are talking about an interest rate cut and also the possibility of QE which could really weigh on the pound. I have been predicting that the low in the 1.15’s could easily be revisited whilst depending on the extent of any measures we couldn’t rule out further falls perhaps 1.11-1.12. This is based on the worst case scenario as the last time the Bank of England announced QE (Quantitative Easing) measures and an interest rate cut the pound fell to almost 1 for 1 with the Euro. The outlook is not quite as bad as perhaps previously considered but it does still carry risks for anyone buying the Euro with pounds.

There is also risk for clients buying pounds with Euros that the pound rises or the Euro weakens. We saw at the beginning of July the pound rise almost 2 cents as the Bank of England disappointed markets by keeping interest rates on hold. They made clear in their commentary that they might look again in August or September so this is when the pound could rise or fall. I think if they fail to do anything they are going to disappoint the market and the pound will rally. We also must recount some of the issues we have over the Euro, the currency is far from out of the woods and whilst strong against such a weak pound the Euro is weak against most other currencies following Brexit and owing to nerves over the Italian banking issues and fears over Greece’s debt. I think these troubles could see the rate rise easily up into the lower 1.20’s with 1.25 a likely top end on the GBPEUR pair.

As you can see there is no magic special forecast as to what will happen next. No one can predict the future but by tracking events and highlighting the important considerations we can help plan and manage your exposure to the market. If you have any transfers from £10,000 up for business or private clients purchasing (or selling) property overseas please speak to me Jonny by emailing [email protected]. I work as a Chief Analyst and Associate Director for one of the UK’s top currency brokerages which has been in business for 17 years so will be very well placed to help you with any requirements you might have.