Author, Andrew Gibson
A Pound to Euro forecast is an expectation of the exchange rate at a point in the future. That could be days, months or even years away.
Exchange rate forecasts are helpful when deciding the right time to exchange your money.
Will the Pound get stronger against the Euro in 2024?
On balance, we believe the Pound has upward momentum against the Euro in 2024. In February 2024, the GBP/EUR rate reached 5-month highs. Underpinning the positive trend is the fact that the UK has higher interest rates than the EU, which provides fundamental support.
Here’s a quick summary of what’s been happening with the Pound to Euro exchange rate:
Inflation has been the core driver of currency markets over the past 24 months.
The UK is battling higher inflation than the EU.
It’s forced the Bank of England to raise interest rates more aggressively than the European Central Bank. This has been a positive catalyst for the Pound in 2023 and the start of 2024.
Why?
Because interest rate hikes tend to strengthen a currency as they attract foreign investment.
The downside to higher interest rates is that it hurts economic growth.
Economic growth has been marginally weaker in the UK than in Europe, and that looks set to continue in 2024.
The OECD forecasts the UK economy will grow by 0.7% in 2024. Whereas, the EU is expected to grow by 0.9% in 2024.
Put simply, both economies are forecast to acheive only modest growth this year.
Another thing to note is that UK growth has been catching up to the EU’s.
Throughout the second half of 2023, the German economy has shown signs of weakness. The slowdown in the ‘powerhouse of Europe’ has seen economists cut forecasts for the EU. At the same time, many ecnomists had pencilled in a mild recession for the UK, but that has now been revised to mild growth.
That gives you a broader view of what’s happening with the Pound to Euro rate at a fundamental level.
On a daily and weekly basis, many smaller news events impact exchange rates.
It’s why the Pound to Euro rate changes every 2-3 seconds.
And the truth is no one has a crystal ball either.
I have seen exact exchange rate forecasts online and they are nonsense. No one can predict exchange rates than precisely.
Absolute certainty is not something anyone can provide for you (although it doesn’t stop publicity-hungry gurus). Forecasting exchange rates is really about probability, not precision.
When it comes to finance, it’s often better to react than predict.
Meaning, take your opportunities when they come along.
If you would like to discuss the pound-to-euro outlook, currency trends or the latest rates, simply request a quote below.
Is it a good time to buy Euros with Pounds?
A good way to view today’s Pound to Euro exchange rate is to compare it to past data.
In 2023, the Pound to Euro rate is trading near its 5-year average. But there’s been plenty of big swings up and down in that time.
In the last 5 years:
- The Average for the Pound to Euro rate has been €1.1509.
- The High for the Pound to Euro rate was €1.2106 (14 Apr 22).
- The Low for the Pound to Euro rate was €1.0681 (23 Mar 20).
Put simply, the average GBP/EUR rate is around €1.15 in recent history. It’s sitting comfortably above that now.
You could consider any rate above the average as a good time to buy Euros with your Pounds. When you are a buyer of Euros, the higher the rate, the better.
Bear in mind, that exchange rates move every few seconds.
That’s why it’s important to keep an eye on the rate and choose a favourable time to exchange your Pounds into Euros.
Pound to Euro Forecast Analysis
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 8 different 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 a 1 ÷ forecast. So a 0.85 EUR/GBP forecast becomes 1.18 GBP/EUR.
In general, most analysts stay close to the current exchange rate 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.
Longer-term forecasts of exchange rates are hard to come by.
That’s because exchange rates are affected by so many factors that they are almost impossible to forecast with any precision over longer time frames.
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 narrow your focus to just a few key things.
Over a short 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, but 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 as 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).
How we can help you
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 just online apps.
However, at Key Currency we 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 Euro 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 the Pound to Euro rate over a week. However over 6 months; it’s not unusual to see swings of 5% or more.
It’s simply because the longer the 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.
Timing matters.
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 as part of our money transfer service.
We work with all 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.
We have found that many customers would rather speak to someone rather than use an app or online system to transfer their money.
Technology has a role to play in finance, but there is no substitute for service.
At Key Currency, we give you one-to-one assistance and work with you to achieve a better exchange rate.
You can read more about us here.
We don’t want to exchange your money at the wrong time. A bad exchange rate could cost you a lot of extra money.
Instead, we will 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.