Pound To Euro Forecast – Is Now The Best Time To Buy Euros From Pounds?

GBPEUR Forecast Highlights

• GBPEUR’s rebounds off 1.120 support following Autumn Budget
• FX may trade around 1.120-1.160 due to relatively static economic and monetary factors
• Watch to sell more GBP at the upper side of range (1.160)

How has the Pound performed against the Euro recently?

GBPEUR was on a downward trajectory for most of this year, a trend largely driven by Euro’s resurgent strength.

If you look at its weekly chart, the pattern of falling highs is unmistakably consistent. A near-perfect resistance trendline can be drawn along the bearish price moves.

But, prices have bounced lately to test the downward sloping trendline. This counter-trend rally was sparked by the conclusion of the much-delayed UK Autumn Budget. Gloomy GBP sentiment prior to this Budget was immediately lifted once that event passed.

This raises the relevant question: Is GBP able to overturn the year-long downtrend here?

Chartwise, two positive points are noted. One, there is support at around 1.120. Even during the tumultuous weeks of Liz Truss administration, this rate quickly rebounded above this level. Buying pressure is strong around these levels and may offer further support in the future.

Two, GBPEUR’s downtrend is nearly one year old. Unless Europe’s fundamentals improve significantly relative to the UK (which I suspect they will not), some mean reversion can be expected in the next few months.

A case can therefore be made for a technical rebound off 1.120-1.130; a bounce that mark the start of a base pattern.

Is it a good time to buy Euros with Pounds?

GBP’s recent rebound is offering a better rate for many Euro buyers. So is it a good time to buy some now?

The answer is affirmative if you do need some Euros now. Buy a portion (target 1.145) and then wait to see if a further bounce materialise (to 1.160). Watch to exchange the rest there.

Looking beyond the winter of 2025, however, the rate’s trend is less clear, although I expect Sterling to maintain its value at around 1.120-1.160 against the Euro. The downtrend here may give way to a more stable price pattern in the next quarter.

You can secure these Euros for use in the future with a currency forward.

Will the pound strengthen against the Euro in the first quarter of 2026?

2025 was a good year for the Euro.

Against the US dollar, for example, the rate rebounded firmly from 1.030 to near 1.200. Much of EUR’s advance was frontloaded in the first few months of the year. The last time the Euro rallied so much against the greenback was back in 2020.

Despite Euro’s positive re-rate, the pattern here remains broadly long-term negative. Prices are still trading below the multi-year, downward-sloping resistance trendline (see below). Arguably you may say the exchange rate here is driven largely by USD weakness rather than overwhelming EUR strength.

So, can the Euro carry on its bull run in 2026?

The first point to note is that Eurozone’s economic growth has been running quite unevenly. While some countries are growing nicely, the heavyweights – Germany and France – are not.

Look at the economic sentiment indicators of key Eurozone nations below. At the bottom are Germany and France; while Spain is doing much better. What a change from a decade ago!

Because of the wide disparity in growth, the net economic impact of the entire European continent could be modestly low. In turn, the annual outlook for the Eurozone is stable, not great. Unless, of course, Germany can revitalise its underlying economic trend through its expansive fiscal spending.

Source: Yardeni.com 

The second issue is ascertaining what the ECB will do in 2026.

Some analysts are now expecting a different cycle here, in contrast to the US and UK. The chart below offers is a summary of the forecasts implied by derivative markets.

Broadly, the ECB is not expected to drop rates further for the next couple of quarters. Not only that, the central bank may even hike rates later in 2026. Naturally this will have some unanticipated impact on the Euro. But by how much? Nobody knows, for sure.

All in all, the Eurozone is expected to grow, but only at a modest rate. The ECB, too, is predicted to hold rates steady for most of 2026. The same can be said for the UK. The ratings company S&P offers these numerical economic predictions – “we expect 1.2% growth in the eurozone and 1.4% growth in the U.K. in 2026, after 1.3% and 1.4% respectively in 2025.”

With no big changes expected on either side, GBPEUR may trade sideways for the foreseeable future.

Source: Financial Times (Dec 2025, paywall)

What is the GBPEUR forecast in weeks, months, years? 

Predictions for GBPEUR are relatively uninspiring. The aggregate predictions are centered around 1.150, with the range fanning out wider as we move further out in time.

This shows that most brokers are anticipating an even pricing. Economic fundamentals on both sides of the continent are similar; as are monetary policies. No big uncertain events on the horizon.

Unless some economic catalysts emerge unexpectedly, the base scenario is a flat performance for GBPEUR.

Source: Exchangerates.org.uk (Dec 2025)