The Pound to Euro forecast is an indication of where technical and fundamental analysts think the GBPEUR price may be in the future. You can use these exchange rate forecasts to help you decide if now is the right time to buy Euros, or if you should wait until the price improves.
How has the Pound performed against the Euro recently?
Sterling has had a roller coaster ride over the past few months. So violent were the swings that it destabilised and toppled the Truss administration. But the new Chancellor Hunt and prime minister Sunak have steadied the ship somewhat.
Sterling rebounded sharply from its late September lows. Against the Euro, the GBPEUR rate has jumped from the intraday lows of 1.085 to 1.170 (see below). It seems the worst is over for Sterling.
Is it a good time to buy Euros with pounds?
If you know you need some Euros in the future, now may not be a bad time to secure these Euros with a currency forward. Sterling has rebounded sharply from its lows and GBPEUR is now trading at the top of its range.
Technically, there is some resistance at 1.165-1.170. This may limit GBP’s advance. Despite the upward momentum in Sterling, it is not a ‘sure thing’ that GBP will progress against EUR in the next few weeks – unless some dramatic events alter the balance of the exchange rate. Events like the ‘mini budget’ we saw back in September crashed the pound and sent gilt yields skyrocketing.
Will the pound get stronger against the Euro in 2023?
This depends on the relative macro data flow. Right now, predicting macro trends is very difficult due to the intense dynamics of the global economy, particular in Europe. Several factors are causing this. One is the war in Ukraine. Two is the on-off lockdowns in China which is causing supply chain problems. The last factor is energy. Natural gas prices have skyrocketed this year. This caused a lot of pain in the industry. While investors have marked down the productivity of energy-intensive sectors but the things are not as bad as they predicted (eg in Germany).
If UK inflation rate continues to surprise to the upside, the Bank of England could be forced to hike rates at a faster rate than what investors are expecting now. As we write, the CPI rate in the UK is at double-digit. A hawkish BoE monetary policy in 2023 will have multiple impacts on the economy that, on balance, may be negative for the economy. This may lead to a weaker Sterling against the Euro.
However, the rate also depends on what the European Central Bank does next year. Inflation in the Eurozone is at par with the UK. This means the ECB could be hiking rate as aggressive as the BoE. The European CB already hiked rates thrice in a row.
Source: Bank of England
What is the GBPEUR forecast in weeks, months, years?
At this point, few economists expect the GBPEUR to move sharply in either side. Both the BoE and ECB will be hiking rates in tandem in 2023 and that the UK and EU are impacted by similar macro factors.
According to some FX websites, they have aggregated various signals and produced a broad forecast for GBPEUR stretching a few months ahead. Here we show one by PoundSterlingLive.com that plotted these forecasts graphically.
You can see that most analysts are expected the exchange rate to trade near the current rate in the near term, possible with some downside on GBP due to its relative macro underperformance (see below). But how accurate are these forecasts? I would view them with some scepticism because the macro picture is in a flux and may change rapidly in the new year.
Chartwise, note that GBPEUR has been trading in a strict band since 2016, with the ceiling at 1.200 and bottom at 1.050. I expect this range to assert over the medium term.
Where is the best place for buying large amounts of Euros from Pounds
There are two different ways people buy Euros from Pounds
- Through a currency broker – when transferring money abroad
- Through a forex broker – when speculating on the price of currency
You can use our comparison table of currency brokers to see how many currencies they offer, what the minimum Euro transfer is and if they offer forwards and currency options as well as when they were established. You can either visit each currency broker individually or use our currency quote comparison tool to request multiple exchange rates.
Or, if you are more interest in trading GBPEUR, you can compare forex brokers here.