Author, Andrew Gibson
Below you will find out the highs, lows & averages of the Pound to Euro rate, its full history, why you can’t trust forecasts, and how to achieve a better rate.
Is it a good time to buy Euros with Pounds?
Buyers of Euros want a high rate. The higher the rate, the more Euros each British Pound is worth.
To help understand whether the current Pound to Euro rate is good or bad, it’s worth getting some historical context.
Before the Brexit referendum, the Pound to Euro rate was trading above €1.30. However, since 2016, the Pound has traded at much lower levels, spending the majority of the time between €1.06 and €1.21.
In 2021 and the beginning of 2022, the Pound to Euro rate has been trading near the top end of its 5-year trading range, meaning it’s a good time to buy the Euro based on recent years.
When you go back 10 years or more, the Pound has been at higher levels against the Euro. But the longer you look back, the less relevant the data.
Things will always change over time.
Therefore, it is better to view the Pound to Euro rate over a time period that still makes sense today.
Will the Pound get stronger in 2022?
Here are the key factors driving Pound to Euro forecasts in 2022:
- The UK economy is expected to recover faster from COVID than the Eurozone
- The Bank of England is expected to raise interest rates faster than the European Central Bank (ECB)
- The concerns over Brexit have reduced for the Pound
- The Ukraine invasion has added risks to the Euro
All these factors are considered positive for the Pound relative to the Euro.
Put simply, the UK is expected to have higher economic growth, tighter monetary policy and less geopolitical risk than the European Union.
If these core themes continue, then you would expect the GBP to Euro rate to continue rising in 2022.
It is worth noting that unknown and unforeseeable event can derail even the best analysis.
It’s why you often hear analysts refer to their ‘base case’.
There’s always the possibility that something significant comes along in 2022 that is not presently known.
These co called ‘black swan’ events can catch the market by surprise and lead to substantial shifts in exchange rates.
The point is absolute certainty is not something that anyone can provide.
Forecasting exchange rates is really about probability. You make an informed judgement based on what is presently known or what can be reasonably anticipated.
Pound to Euro Forecast Poll (1 week, 1 month, 1 quarter)
All forecasts are someone’s opinion – their prediction of the future.
And there are plenty of opinions out there.
If you are looking for a snapshot of opinions over different time horizons, then you can see the latest EUR/GBP forecasts by analysts and banks collated by FX Street.
It lists the views of 28 analysts and gives 1 week, 1 month and 1 quarter forecasts.
Annoyingly, it’s presented as Euro to GBP, not GBP to Euro.
So ‘bullish’ would mean good for the Euro, and ‘bearish’ would be good for the Pound.
If you want to flip the forecasts into a Pound to Euro rate, then just do 1 ÷ forecast. So a 0.85 EUR/GBP forecast becomes 1.18 GBP/EUR.
In general, most analysts stay close to the herd over short time frames. It means most forecasts are simply extrapolations of the present rather than predictions.
It’s called ‘career risk’ if you dare to be different.
But it still gives you a guide for what the view is in the City across a large cross-section of analysts’ opinions and the overall bullish or bearish sentiment.
Pound to Euro Forecast Weekly – a common-sense approach
If you are looking for a Pound to Euro forecast over the next week, you can really narrow your focus to just a few key things.
Over a short time period, there will only be a small number of fundamental factors that will influence the Pound to Euro rate.
To get a quick snapshot of what’s happening over the next week, my advice would be to check out the DailyFX Economic Calendar.
It not only lists this week’s economic news, it also gives you the market expectation and the relative importance of each number (low, medium, or high).
An economic calendar is a good way of knowing whether anything big or important is due out.
If nothing major is on the horizon, then you can focus on the current trend in the Pound to Euro rate.
Is the Pound in an upward or downward trend or trading in a clear range?
Over a daily or weekly basis, use trendlines are your guide and be ready to take advantage of any favourable moves.
Sometimes spikes and dips in the Pound to Euro rate are purely down to technical reasons – the collective action of traders buying and selling for speculative purposes.
Use near-term trading ranges or trendlines as your guide, and don’t be too greedy (we are all susceptible to that).
If you don’t feel confident going it alone, you may wish to speak with a money transfer specialist.
Most money transfer companies these days are really just online apps.
However, others, such as ourselves, provide clients with access to a currency broker who can discuss your requirements and help guide you on exchange rate trends.
Part of our service is to monitor currency markets on behalf of our clients.
We can talk about specific levels to aim for or simply pounce on a favourable rate when the situation arises.
It’s a more proactive way of achieving a better rate, rather than having to accept whatever rate is put in front of you by an app on a given day.
Pound to Euro Forecast next 6 months – practical advice
When it comes to exchange rates, time brings more risks and more opportunities.
A 1% swing might be considered a big move in Pound to Euro rate over the course of a week, however over 6 months; it’s not unusual to see swings of 5% or more.
It’s simply because the longer the time period, the greater the likelihood that something significant will happen.
But when should you convert your money if you have no specific time in mind?
There’s always a reason to defer.
We hear this all the time:
- The Pound is getting stronger; I’ll wait for it to go up some more.
- The Pound is getting weaker; I’ll wait for it to recover again.
You can see why there’s never a perfect time!
The hidden cost is that your money is sitting idle and not contributing to your life plans.
I’m not suggesting you just go ahead at any old time.
My practical advice would be to use historical reference points as a guide to your decision.
Start by looking at a GBP/EUR chart using different timeframes.
- When did the rate last trade at current levels?
- How high or low is the rate compared to the last 5 years?
- How long has the current trend been running?
You don’t have to become a wizard of wall street; you just want to take advantage of favourable fluctuations.
It’s a case of trying to achieve the best rate possible and then moving on with your life.
You might find it useful to speak to a professional who is watching rates continuously throughout the day. It’s something we offer are part of our money transfer service.
We work with our clients to achieve a better rate and take advantage of favourable moves.
Need guidance on exchange rates?
These days most money transfer companies just give you access to a platform or app and leave you to do everything yourself.
The way we operate is fundamentally different.
Many customers would rather speak to someone, rather than use an app or online system to transfer their money.
At Key Currency we give you a one-to-one service and work with you to achieve a better exchange rate.
We don’t want to exchange your money at the wrong time. A bad exchange rate could cost you a lot of money.
Instead, we will understand your position and help exchange your money to your best advantage.
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Key Currency is an FCA regulated Authorised Payment Institution (No. 753989), and as such, all money transfers are conducted through safeguarded client accounts.
To compare our rates, or discuss pound to euro forecasts and current market trends, just request a free quote.