Today's Pound Sterling to Euro Exchange Rate News / Forecast With Live GBP to EUR Conversion, FX Predictions for 2015 and 2016
Foreign currency markets saw the British Pound to Euro exchange rate slump sharply from recent best conversion levels after the Bank of England release saw GBP pressured.
Although some economists had dubbed it ‘Super Thursday’, that day last week was anything but for the Pound Sterling complex.
Friday brought some relief after the Euro tanked versus the Pound and the US Dollar exchange rates after investors priced-in increased bets of a December 2015 US interest rate hike.
Here's a quick look at the live foreign currency rates today:
On Monday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
Today finds the pound to pound spot exchange rate priced at 1.
The live inter-bank GBP-CHF spot rate is quoted as 1.137 today.
The live inter-bank GBP-USD spot rate is quoted as 1.255 today.
NB: the forex rates mentioned above, revised as of 6th May 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
British Pound to Euro Exchange Rate Forecast
In a note to clients, Lloyds Bank 2015-2016 forecast for the GBPEUR:
"With rates markets still pricing the end of 2016 for the first rate move, the GBP should still be limited to the downside against the USD, and with further QE/stimulus still expected from the ECB later this year EURGBP should be limited on the topside."
Prior to the day itself, the Pound Sterling to Euro exchange rate was previously pushed up and down in equal measure by the UK October PMIs of the week; the Manufacturing variant on Monday rose from 51.8 to 55.5 against forecasts of a decline, but Tuesday’s Construction result fell from 59.9 to 58.8.
Wednesday saw the GBP to EUR rate rise in value again when the Composite and Services PMIs both exceeded forecasts by growing, but ‘Super’ Thursday eclipsed both the positive and negative results in terms of scale and effect.
Instead of further encouraging investors to predict that a UK interest rate hike would be due early in the coming year, the Bank of England (BoE) minutes were instead dovish in the extreme, so much so that many economists changed their expectations to 2017 at the earliest.
The Inflation Report predicted a sub-1% rate until at least mid-2016, and the UK’s overall growth estimation was also downgraded by the central bank.
Eurozone PMIs less Supportive to EUR to GBP Exchange Rate Last Week, ECB’s Draghi Speech caused Unexpected Appreciation
In a situation similar to the UK, the Eurozone released a large number of PMI figures last week.
Also like the UK, the results were not entirely supportive or negative, with the German printing consistently failing to support the single currency.
Outside of these inconsistent results, a rise in the value of the common currency came from an unlikely source when European Central Bank (ECB) President Mario Draghi delivered a speech on quantitative easing (QE) in Milan on Wednesday.
While discussing QE has previously been damaging to the Euro, Draghi’s assertion was that due to the apparent effectiveness of the scheme so far, it could be adjusted or even stopped from expanding after the ECB’s December review.
The Euro exchange rates jumped up in value at the news, gaining after a week of downtrends.
The Euro soared from a rate of 0.7045 against the Pound Sterling on Thursday to 0.7190 after the BoE reports came in.
Eurozone GDP Results to End This Week’s GBP-EUR Exchange Rate Movement
The coming week will bring the Eurozone Sentix Investor Confidence score for November on Monday, the UK Claims, Earnings and Employment figures for October and September on Wednesday and German CPIs on Thursday.
Speaking in terms of impact, however, the most movement in the pairing is likely to come from Friday’s German, Italian, French and overall Eurozone GDP figures for the third quarter.
BoE’s Carney Offered Tortoise-Like Take on Central Bank’s Future Attitude to Rate Hikes Last Week
Speaking in a press conference after the BoE’s minutes were released last week, Governor Mark Carney emphasised the need for prudence by BoE policymakers in both the current year and the coming year by saying:
‘Monetary policy must continue to balance two fundamental forces - domestic strength and foreign weakness. The outlook for global growth has weakened since August. Many emerging-market economies have slowed markedly this year, and the committee has downgraded its assessment of their medium-term growth prospects’.
Speaking with regard to the BoE’s Inflation report which was also downgraded, Carney again mentioned the balance present in all economic policy forecasts by saying:
‘The outlook for inflation reflects the balance between persistent drags from factors such as sterling and world export prices, and prospective further increases in domestic cost growth’.
Leading Institution Forecasts for the Euro to Pound Exchange Rate
Citi analysts are shorting the EUR to GBP Exchange Rate:
"GBPUSD dips in line with the USD strength overnight though finds support around the 1.5360 area following another strong PMI report and taking EUR-GBP down to current levels at 0.7065.
"The 100d MA at 1.5485 still remains key resistance in GBPUSD while clear levels of support target 1.5350 and 1.5245.
"The better trade still remains on crosses (long GBPJPY & GBPCHF, short EURGBP)." Citi Research
Scotibank are in agreement and see further euro (EUR) exchange rate pressure from additional QE in December:
"The euro (EUR) will under-perform broadly in the coming year against most major currencies.
"European Central Bank (ECB) President Draghi strongly hinted that additional monetary stimulus may be introduced at the December policy meeting in response to persistently low euro zone inflation.
"Prospective action may include changes to the operational terms of the ECB’s quantitative easing (QE) programme as well as a cut in the key deposit rate (-0.20% currently).
"We have adjusted our forecast for EURUSD lower and now anticipate EURUSD basing at 0.95 in the second half of 2016." Scotiabank
The latest GBP to EUR news sees range-bound trading for the pound/euro pair
On Monday morning the Pound Sterling to Euro exchange rate was trending within a limited range.
With the US Dollar cooling fractionally amid concerns of overvaluation, the single currency edged higher versus its major peers. Positive German trade data also aided demand.
Additional gains can be attributed to Eurozone Investor Confidence data which eclipsed expectations in November of a jump from 11.7 to 13.1, with the actual result climbing to 15.1.
The increase in confidence came in spite of the recent Volkswagen scandal and concerns relating to its potential impact on German output. Whether this higher level of confidence endures remains to be seen however, and the recent revision in Federal Reserve interest rate hike expectations may weigh on common currency demand in the near future.
However, significantly divergent policy outlook should keep the common currency trending lower versus the US Dollar and Pound Sterling in the long-term.