Pound to Euro Forecast: 1.1598 in Three Months

Currency analysts at Credit Suisse predicted Pound Sterling's outperformance in recent months long before the majority of their peers in investment banking circles.

The Pound to Euro exchange rate's year-to-date rally has been frustrated by a major level of technical resistance on the charts thus far in the latter half of May but the consolidation around the 1.15 level could give way in either direction following this Thursday's release of European inflation figures for April. 

EUR struggles on news Germany in recession, UK long-term yields fall following inflation data, but yield curve inversion can support GBP says ING.

The Pound to Euro exchange rate's five-week rally has been hindered by a dense pocket of resistance on the charts in recent trade but it could get an opportunity to break above and beyond 1.15 this week if Sterling gains salvation from inflation, or if other UK data surprise strongly.

ABN AMRO has upgraded its forecast for the British Pound against the Euro and Dollar expecting the Bank of England to be less "dovish" over the coming months than the ECB and Fed.

Pound Sterling has likely peaked against the Euro and is pointed lower as the Bank of England has already ended its interest rate hiking cycle in the face of softening economic data.

The Pound to Euro exchange rate reached new highs for the year last week but could be set for some consolidation between those earlier peaks and somewhere just above the round number of 1.14 over the coming days. 

70% chance the Bank of England hikes and keeps guidance unchanged, 20% chance a halt to the cycle is signalled = 90% chance the Pound falls today.

Analysts at Goldman Sachs have upgraded their tactical stance on the British Pound to "outright constructive" amidst a surprising UK economic resilience and fading central bank divergence risks.

The Pound to Euro exchange rate entered the new week trading back above 1.14 and may attempt to rise further in the days ahead but this Thursday's forecast update and interest rate decision from the Bank of England (BoE) are both wild card risks that could cut either way for Sterling.

The British Pound has come under pressure against the Euro in May as investors bet Thursday's European Central Bank (ECB) interest rate decision and guidance will see it maintain its crown as the most hawkish of the major central banks.

The Pound to Euro exchange rate approached the year's highs last week and could attempt to reach its best levels since December 2022 if Euro area inflation ebbs again and the European Central Bank (ECB) adopts a less hawkish monetary policy stance in the days ahead. 

The Euro is in demand and this will likely remain the case into the early May ECB interest rate hike.

The Pound to Euro exchange rate steadied above its April low last week but whether it can recover by much this time out likely depends on how German inflation and economic growth numbers from Europe's major economies impact expectations for European Central Bank (ECB) interest rate policy.

Favourable April seasonality propels the Pound to its strongest valuation against a host of currencies since the start of the year, but momentum indicators look overbought and gains should fade says Bank of America.

The Pound to Euro exchange rate was pushed back to early February lows last week and the risk is that any attempted recovery is hampered this week by a renewed ebb of the inflation tide on Wednesday.

The British Pound could experience a setback as the Bank of England will surprise investors by keeping interest rates on hold in early May, according to a leading investment and commercial bank.

GBP/EUR near year's highs but with obstacles ahead.

GBP/EUR rallies continue to be frustrated by selling pressure that ultimately tends to dump the pair back into a well-trodden range.

The British Pound's outlook remains upbeat in the near term although headwinds will likely ensure the prospect for substantial gains remains limited, according to one of Europe's largest commercial and investment banks.