Is Euro Stronger Than Pound In Long-Term?

Is the Pound going to get stronger against the Euro?

EUR GBP is the most liquid and most popular cross rate without the USD. The fact that the leading economy of the European Union has never switched to the single currency, and now "lives separately" makes the EUR GBP pair almost unique. The influence of the US dollar on the dynamics of the pair is average.

Experts predict that in 2024, the pound will continue to rise relative to the euro. The rate of GBP to EUR hit five-month highs in February 2024. The fundamental support for this positive trend comes from the UK's higher interest rates than those of the EU.

The analysis from experts suggests that the pound could strengthen even though the EUR/GBP exchange rate has remained stable below 0.86. However, this could change as the key determinant of the EUR/GBP exchange rate will be the central banks' actions, which will inevitably result in lower interest rates.

Exchange rates can be affected, for example, if the Bank of England (BoE) raises or maintains interest rates and the European Central Bank (ECB) cuts its rate. But such a bearish trend in EUR/GBP would be short-lived.

Reduced interest rates have the potential to deter foreign investment in the European Union. The demand for the currency of that region may rise if investors relocate their money to places with higher interest rates, such as the UK. A central bank's attempt to stimulate the economy by lowering interest rates may affect inflation expectations. Aware of these developments, investors will affect the value of currencies.

Low volatility in international markets has helped to support the pound even though overall ranges have remained narrow. The Euro has also benefited from expectations of a rebound in the Euro-Zone economy and skepticism about the ECB's willingness to approve a rate cut soon.

The foreign exchange strategists at HSBC forecast that the pound's value will fall to 1.1480 against the euro. In contrast, Nordea anticipates that EUR/GBP will climb to 0.84 by the end of 2024. With 5-month highs at 0.8517 before consolidating at 0.8525, EUR/GBP managed a noteworthy weekly net gain.

What other factors will influence the euro pound in 2024?

The Euro may lose value relative to the Pound if inflation in the Eurozone increases more than in the UK. The possibility of the interest rate differential narrowing arises from the Bank of England's (BoE) maintaining rates while the European Central Bank (ECB) reduces rates. In addition to inflation and rate cuts, other factors that can influence the EUR/GBP exchange rate in 2024 are:

• Economic Indicators: Numerous economic indicators offer valuable perspectives on the general economic well-being of the United Kingdom and the Eurozone, including GDP growth, unemployment rates, and manufacturing data. The movements of these indicators, whether positive or negative, can affect the exchange rate and investor mood.

• Geopolitical Events: Geopolitical developments, trade agreements, and political stability can impact currency values. Events like elections, trade negotiations, or diplomatic tensions can introduce uncertainty into the EUR/GBP exchange rate.

• Market Sentiment: Risk perception and investor attitude are important factors. The demand for the Euro or the Pound can be impacted by traders' decisions based on news, speculation, and global economic conditions, both positive and negative.

As a result, it is projected that market sentiment, geopolitical events, central bank decisions, and economic indicators will drive and potentially influence the EUR/GBP exchange rate in 2024.

EUR/GBP Long-term chart

EUR/GBP Long-term chart

The British pound and the euro are in a consolidation phase, meaning that market movement is still unpredictable. Since the end of 2016, the "chunnel" (EUR/GBP) has been consolidating. Since the last quarter of 2016 and early 2017, the pair has been retesting the resistance and support zones it established at 0.92000 and 0.83500, respectively.

A prolonged period of sell momentum could lead to a retest of the 0.83500 support zone for EUR/GBP. However, economic factors such as the monetary policies of the European Central Bank (ECB) and the BoE's anticipated interest rate reduction by the second half of 2024 will determine the long-term movement of the Euro and British pound.

Note

You can follow the TU experts' regular analysis of the pounds-to-Euro price charts to stay current on the most recent value.

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What is the EUR/GBP prediction for 2024?

After the EUR/GBP rate reached 5-month highs in February 2024, many financial firms and experts had a different view of the value of the EUR/GBP by the end of 2024. According to Danske Bank's forecast, the EUR/GBP exchange rate will drop to 0.8793 in six to twelve months. On the other hand, Credit Agricole predicts that by the end of 2024, the EUR/GBP exchange rate will be 0.8403. Below are other forecasts by experts on the assertion: Is the pound going to get stronger against the euro?

• According to HSBC's forecast, the EUR/GBP exchange rate will hover around 0.86 until 2024
  Though HSBC anticipates a robust UK economy and believes that EUR/GBP can maintain its value and trade at 0.8643by the end of 2024, the overall data flows reinforced expectations that the ECB would lower interest rates before the Bank of England, which would have bolstered the value of the pound. According to this, a strong Euro after the end of 2024 seems remote.

• Rabobank predicts that the value of the euro relative to the pound will rise to 0.8647
  According to Rabobank's forecast, the pound-to-euro (GBP/EUR) exchange rate will increase by the end of 2024. Rabobank's prediction is based on the theory that interest rate differentials between the UK and the Euro area are the reason why the Pound is currently trading at an unnaturally high level.

• Goldman Sachs predicts that the EUR/GBP exchange rate will be in the 0.8333 zone for the next 12 months
  Goldman Sachs is more optimistic about the pound's ability to strengthen to 1.20 (0.8333 EUR ) in light of the gains the pound made in 2023 (the EUR/GBP exchange rate managed a net gain to 0.8672 at the end of 2022, up from 0.8850 at the end of 2022).

• Nordea anticipates that the EUR/GBP will rise to 0.9174 at the end of 2024
  Nordea believes that the EUR/GBP will rise to 0.9174 as three rate cuts in the markets can go without significantly changing the macro picture, given that the ECB is focused on cutting rates in June.

• ING expects thatEUR/GBP will strengthen 0.9001 on a 12-month
  This forecast comes because the Bank of England is cutting rates more aggressively. As evidenced by its current one-year expected volatility of 5.7%, the EUR/GBP pair has historically had very little volatility. ING Economics analysts forecast that the Euro-to-Pound (EUR/GBP) exchange rate will marginally surpass the outright forward rate in 2024.

Note

Overall, there is a possibility that the EURO will trade between 0.8333 in 2025 and 0.8547 –0.8475 in 2026. Investors can monitor changes in the GBP and EUR exchange rates with the help of the TU expert analytics review of EUR/GBP daily.

EUR/GBP forecast for 1 day, 1 week, 1 month

EUR/GBP forecast by TU is prepared automatically on the basis of technical analysis of moving averages and indicators for each timeframe (interval) separately. Select the timeframe you need to find out EUR/GBP price prediction for today.

Note!

Signals may differ on different timeframes. If you want to hold the EUR/GBP for longer than 1 week/1 month, it is best to use the signals on daily and weekly timeframes. Timeframes from 5 minutes to 1 hour are best suitable for short-term transactions.

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