Pound to Euro forecast before European elections next week

In today’s Pound to Euro forecast, we’ll look at how exchange rate has risen higher, after a positive end to last week for Sterling exchange rates.

UK Gross Domestic Product (GDP) numbers jumped higher on Friday, taking growth to 0.5% for the quarter, compare to 0.2% in the previous quarter. Much of the strength in the numbers is reportedly coming from companies stockpiling goods, in the event of a disorderly Brexit. This would suggest that the rise in growth won’t be sustainable, going forward.

The Pound rallied, although gains are still proving limited, with ongoing Brexit uncertainty. This seems unlikely to change any time soon.

Negotiations between the Conservative and Labour Parties over Brexit are still continuing. However, there is still a lack of agreement over the proposed Customs Union, and there’s also the fact that Labour seek a confirmatory second referendum on EU membership.

UK unemployment data is released on Tuesday, and could help shape the direction of travel for GBP to EUR. So far, unemployment has remained extremely low, despite the Brexit uncertainty. If this continues, it could be yet another vote of confidence in the Pound.

Euro forecast for next week

The European elections will be held on 23rd May, and may result in considerable volatility for the GBP to EUR pair.

British voters who are disappointed with MPs from the two major parties are expected to take revenge, and vote for either remain-supporting parties or the Brexit Party, headed up by Nigel Farage.

A strong result for the Brexit party could help form new policy on Brexit, and see a different path that what is being discussed at present. However, a cleaner break, and one that is on World Trade Organisation rules, could see the Pound fall sharply. When it comes to Brexit, none of the different outcomes can be discounted.

Meanwhile, Italy is back under the spotlight. The European Commission (EC) has highlighted that Italy will once again spend too much in its budget, which the EC had agreed with Italy only recently.

As Italy is a major EU economy and one that is deemed too big to fail, this could see further problems for Euro exchange rates. Any deterioration in the Italian economy is likely to put added pressure on the Euro.

For more information on the Euro and assistance in making transfers, either buying or selling Euros, then please get in touch with me, James Lovick, at jll@currencies.co.uk.