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

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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.

GBPEUR Forecast Highlights

  • Inflation rates are tumbling in major European countries
  • Central banks (BoE/ECB) are expected to halt their aggressive rate hikes
  • GBPEUR rebounded off its 1.150 floor recently; affirming the range formation

How has the Pound performed against the Euro recently?

The British and European economies these days are hardly diverging. When the war in Ukraine broke out, all countries on both sides of the Channel suffered from sky-high energy prices, negative growth rates and tight monetary policies.

While the UK was the first to tumble amidst the turbulent macro undercurrents (eg, spiking bond yields), other European countries soon followed suit. Germany, for example, the powerhouse of the Eurozone economy, is facing increasing headwinds. The country flirted with a recession back in  3Q’23.

In comparison, the British currency stabilised after the disastrous Truss administration was replaced. As a result, GBPEUR quickly rebounded from 1.100 in late 2022; the rate has been trading in between 1.120-1.180 since.

Given the synchronicity of the European economic paths, GBPEUR is expected to continue to range sideways for the foreseeable future. Macro events are impacting most European countries in the same way. This translate into a muted sterling-euro rate.

GBP did rebound modestly towards the end of last year (due to the oversold summer decline); but that didn’t last. Support only recently emerged at 1.150 to check to correction. With the overhead ceiling still intact, GBP bulls may launch another unsuccessful attempt at it.

Is it a good time to buy Euros with Pounds?

Based on the above analysis, it is a good time to buy Euros now?

If you know you need some Euros in the near future, now may not be a bad time to secure these Euros with a currency forward. Sterling is bouncing off its recent lows and the rally in GBPEUR may encounter resistance at 1.180.

Of course, you may wish to wait further until GBP strengthens into the top of the range near 1.180. This only works if you can afford to hold on longer. The risk is that Sterling may weaken again in spring (again) as the day-to-day macro dataflow underperform expectations. Buying on the spot when you need the Euro always carries some risks.

Will the pound get stronger against the Euro in 2024?

That’s the hope. However, from the economic perspective, there is no strong bullish catalyst on the horizon that will alleviate the British economy significantly. Remember, for an FX trend to persist, there has got to be some ‘imbalance’ somewhere between the two countries.

For the UK, there are three macro risks worth mentioning.

  1. First, the UK economy is still struggling from high borrowing costs. Although the Base Rate is expected to soften this year, this is by no means guaranteed. The good thing is, UK mortgage rates are falling. This is helping to alleviate the financial burdens of household.
  2. Second, the political cycle is shifting again in the UK due to the coming general election. Political shocks – which UK had many since 2015 – are ringing at the back of traders’ minds when analysing GBP. Will the current administration survive the GE, or will it be replaced by the opposition? If the latter, what will they do? Reams of questions with no firm answers.
  3. Third, how far will inflation fall? News are emerging that food price inflation is dropping. But this may pause at some point in 2024. What will the Bank of England do on lower inflation?

In Europe, inflation rates are already tumbling back to their 2022 levels in a most major economies (see below). This is a sign that the ECB may start to cut rates to promote economic growth.

Remember, central banks herd too. When one major central bank starts doing something different in a new direction, others will quickly follow.

Based on this thinking, GBPEUR is expected to range trade for the time being given both regions are moving in the same direction.

Source: Yardeni.com

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

GBPEUR rebounded off its short-term lows recently. But the market is still not too sure about the sustainability of this strength.

If we look at the aggregate forecasts for the rate, GPBEUR has a wide range of future expected rates. This shows one thing – even analysts themselves aren’t really sure what the rate will trade at over the medium term.

According to the aggregated forecasts by PoundSterlingLive.com, the rate is expected to dip in the coming months before rebounding into the year-end. That’s sounds logical given the number of macro headwinds the UK economy is facing.

But I would view these predictions with some scepticism because the macro picture is extremely dynamic and may change suddenly during the year. If, for instance, the economic performance deteriorate faster than expected on in Europe, that may alter the expected path of the policy rate and the GBPEUR rates.

Chartwise, GBPEUR is expected to range at the band 1.1450-1.170.

Source: Poundsterlinglive.com (Jan 2024)

Where is the best place for buying large amounts of Euros from Pounds

There are two different ways people buy Euros from Pounds

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 interested in trading GBPEUR, you can compare forex brokers here.

The current GBPEUR exchange rate is $1.17009 which is a change of -0.03% from the previous days closing price. Over a week GBPEUR is -0.03%, compared to it’s change over a month of 0.17% and one year of 2.53%.

GBPEUR exchange rate data is updated every 15 minutes.

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