![]() While it remains to be seen how these predictions will materialise, such insights highlight the complex interplay of economic indicators, policy decisions, and market sentiment that underpin movements in the GBP/EUR exchange rate. The more hawkish market expectations compared to Nomura's forecast, coupled with a potential slowdown in inflation, seem to paint a picture of a weakening Pound against the Euro. These various factors coming together form the foundation of the analysis. "With the market pricing in 121bp of BOE policy rate hikes by year-end (versus our forecast of 75bp) and our leading indicators suggesting UK CPI could surprise on the downside in H2, we think EUR/GBP will likely grind two big figures higher to 0.88 or even 0.90 by year-end," Chan elucidates. This shift, combined with the Bank of England's (BoE) aggressive rate hike predictions compared to Nomura's more conservative outlook, introduces an element of potential downside surprise. Such a shift might present a more challenging environment for the British Pound (GBP), especially considering the current backdrop of underwhelming growth expectations globally. "Markets have moved away from trading rate spreads (which would argue for GBP strength) and instead are more focused on growth expectations, with global surveys disappointing and leading to the underperformance of high-beta FX," he adds. However, these insights form just a part of the overall picture.ĭelving further, Chan posits a shift in market focus that has considerable implications for the Pound.Īccording to the analyst, currency investors are now placing less emphasis on rate spreads, which would typically argue for GBP strength, and are instead concentrating on growth expectations. This observation indicates that Chan, along with many other analysts, does not expect significant volatility in the GBP/EUR exchange rate in the immediate term due to lack of market-moving data. If you want to convert the values of each. Below you'll find both exchange rates USD/EUR and inverse EUR/USD. Accurate exchange rates updates in live mode, so all information are fresh. It is a similar story in the euro area, with just PPI and retail sales releases overall, next week is unlikely to lead to significant moves in GBP from a data angle," says Chan. Check live USD to EUR exchange rates chart, history US dollar to Euro exchange rates data in charts and detailed tables. "It should be a pretty quiet week ahead for the UK, with just final PMIs (are they revised lower?) and the BOE’s decision-maker panel. Simultaneously, he paints a similar picture for the Euro area. ![]() ![]() ![]() The FX Strategist suggests a relatively uneventful week ahead for the UK, with limited potential market-moving data. With today's GBP/EUR rate quoted at 1.17075, this marks a substantial decline in valuation for Sterling. The forecast equates to a Pound to euro exchange rate declining to 1.11 by end-2023 / start of 2024. "Flat GBP, but expect to see EUR/GBP move towards 0.88 and 0.90 by year-end," says Craig Chan, Global FX Strategist at Nomura. Global FX Strategists at Nomura highlight an overall flat outlook for the Pound Sterling (GBP) in the immediate term, yet anticipate a noticeable decrease in the GBP/EUR by the end of 2023. ![]()
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