Forecasts for GBP to EUR
The exchange rate forecast for GBP to EUR suggests ongoing volatility influenced by both domestic political events and international trade tensions. Recent developments, including U.S. President Trump's announcement of a 10% tariff on UK imports, add an additional layer of uncertainty surrounding the British pound (GBP). Analysts note that as local elections unfold, the pound has traded sideways, reflecting the cautious sentiment among investors who remain wary of potential political instability in the UK.
Currently pegged at 1.1743, the GBP to EUR exchange rate sits 1.2% below its three-month average of 1.1884. The pound has been operating within a relatively stable range of 5.3%, from 1.1517 to 1.2127, indicating some degree of resilience amidst external pressures. However, as highlighted by currency experts, the absence of significant UK economic data and local political dynamics could lead to a lack of clear direction in the pound's short-term performance.
Simultaneously, the euro (EUR) has softened against the backdrop of a strong U.S. dollar and geopolitical tensions, particularly the ongoing ramifications of the war in Ukraine. Reports indicate that the euro has been influenced by recent 20% reciprocal tariffs imposed on EU goods, further complicating its trade outlook. Analysts anticipate that upcoming Eurozone Consumer Price Index (CPI) figures will be critical; should inflation cool further, it may exert downward pressure on the EUR.
Regarding external factors, the substantial drop in oil prices, recently noted at 90-day lows near 61.29—a stark 13.2% below its three-month average—could also impact the euro. As oil prices frequently influence economic stability and inflation in the Eurozone, any clear trends in commodity prices will be closely monitored by traders.
Overall, analysts suggest that the GBP will be heavily impacted by the UK’s economic recovery trajectory and the Bank of England’s monetary policy decisions, while the euro will depend on the European Central Bank's actions and the broader stability of the Eurozone economy. Investors should stay informed about these developments, as shifts in economic indicators or political climates will likely lead to fluctuations in the GBP/EUR exchange rate in the near future.
