Where GBPEUR pair will move in 2024
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
The pound and the euro are among the most traded global currencies. However, discussions about them are often linked to the US dollar, with GBPUSD and EURUSD pairs taking the spotlight. In this text, we aim to find answers to what to expect from the GBPEUR currency pair in the upcoming year.
First, let’s examine the chart illustrating the pound-to-euro movements over the last five years. It reveals that the game has mostly been played on the GBP’s field, suggesting that the British pound has held a dominant position over the euro during this period.
As of 2023, the GBP has appreciated against the euro by approximately 3%.
However, the British currency stands tall not only against the euro but also in comparison to other major currencies, showcasing its outperformance.
Currently, the GBPEUR pair is trading at nearly 1.16, and the question is: where it might head by the end of 2023 and the beginning of 2024? Well, it appears that significant changes are unlikely.
Both the European Union and the UK demonstrate similar economic trends, with signs of a slowdown. Furthermore, as each interest rate hike adds pressure on the local economies, local central banks are unlikely to raise rates, meaning that this factor might have little impact on the exchange rates in the medium term.
Consumer spending in both regions faces pressure, and Great Britain is grappling with challenges in the property market. Overall, experts anticipate similar growth rates for these regions in the coming year.
If recently market participants thought that USD would decline to the GBP and the EUR in the future, now their opinions are less straightforward. Nevertheless, this is not a critical factor in euro-pound relations if they move up or down in tandem.
Certainly, news, central banks’ statements, market expectations, geopolitical events, and other factors will move the exchange rate in different directions. But now, experts do not foresee significant fluctuations and forecast the rate somewhere between 1.13 and 1.17 in a year. So, to capitalize on shorter-term movements, it's essential to stay informed and closely monitor the markets. Just make sure you conduct your own in-depth analysis before making any market decision.