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Pound to Euro Forecast, Daily update
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Pound to euro forecast and sterling dollar forecast. Updated each week we take a look
at the pounds movement vs the euro and the pound vs the dollar.
February 20th 2012 29th January The pound reached a near 5 week high versus
the US dollar on Friday. Meanwhile the euro rose versus the pound after a possible agreement to help solve the Greek debt
crisis emerged. 23rd January The pound fells agains the euro today as there were fresh hopes that the euro crisis could be resoved. The pound did reach a 2 week high however against the dollar but there were not stronger gains for the pound as investors still fear that the UK is set to see more monetary easing in 2012. 17th January The pound fells versus the euro today with concerns that the Bank of England is close to resuming monetary easing in the UK. The pound did however rise versus the US dollar. "The lower CPI is, the more ammunition it gives the BoE to do more QE, and we are approaching February when most people think the Bank will increase asset purchases," said Gavin Friend, currency strategist at nabCapital. The forecast for the euro remains bleak with the euro zone's rescue fund having its credit rating slashed by Standard & Poors on Monday.The pound has also risen versus the yen. 14th January The pound came away from its earlier 2 week low versus the euro, rising against
the single currency. However the forecast for the pound is not promising as there are concerns that the UK is heading towards
another recession and that the Bank of England will resume monetary easing.
The Bank of England has voted to continue to keep
UK interest rates as they are. 6th January
The pound as forecast has continued to soar versus the euro, today it reached a 16 month high versus the euro. Once again the pound did fall versus the US dollar. Investors continue to buy the pound against the euro whilst concerns that 2012 is going to bring more problems for countries in the Euro Zone. 4th January 2012 The pound
is at a near 1 year high against the euro today. However investors still shunned the pound in favour of the dollar as concerns
that the UK economy is still not looking good in 2012 meant investors looked for a safer place to invest their cash. If the
UK shows further signs that it is entering another recession we can expect further sales of the pound in favour of the US
dollar. 27th December On Tuesday trading was lower than usual as the London markets were closed but sterling saw a decline as the market expected more results from the QE programme. “While interest rates are unlikely to go lower than 0.5 per cent, it is odds-on that the Bank will undertake more QE early in 2012 to try and boost the struggling economy,” Howard Archer at IHS Global Insight, said. 17th December The pound was at a near 10 month high against the euro on Friday. However concerns over the UK economy could mean that further rises for the pound are unlikely. "The UK is heavily exposed to the financial sector and there is a good chance it could catch up with euro weakness now as we head into year-end," said Ian Stannard, head of European FX strategy at Morgan Stanley. 8th December The pound hit a high vs the euro today, the highest in one month and is is forecast that the pound will continue to rise vs the euro after the market was disappointed with the ECB's lack of determination to solve the European debt crisis. The Bank of England has kept UK interest rates at 0.5%. 27th November The pound went to a 7 week low vs the US dollar last week as investors stayed clear of risky currencies of which the euro and the pound are considered to be. A key Bank of England policy maker has said that the UK risks sliding back into recession. Germany failed to sell all its bonds last week that it had put to auction. If Germany loses the faith of investors then the pound could rise vs the euro in the near future. 16th November The pound hit a 4 week high versus the dollar with the Bank of England leaving the door open for further monetary easing. The concerns of the huge level of debts in the Eurozone had investors returning to the dollar as a safer place for their cash. UK unemployment is at a 15 year high. "It's all bad news for sterling, but the surprise effect was limited, which is why the scale of the sterling decline is also limited so far," said Audrey Childe-Freeman, EMEA head of currency strategy at JP Morgan Private Bank. 14th November 2011 The UK pound
today reached a 6 week high vs the US dollar. The forecast remains a weak one for the pound today. If the summit held in Europe
resolves the Eurozone crisis then we can expect to see the euro rise and the demand for the pound fall. 20th October 2011
The pound rose vs the US dollar today for a short time after some unexpected good news re UK retails sales. UK retails sales rose higher than expected last month which surprised traders. 19th October 2011
Sterling is still struggling but did reach a one month high vs the dollar today whilst falling vs the euro. The forecast is that there could be further selling of sterling as the Bank of England pumping money into the economy in the short term has devalued the pound. Reuters has reported the following. Sterling hit a near one-month high against the dollar on Wednesday, supported by better risk sentiment, but ran into selling by Asian central banks and other investors at higher levels. Traders said sterling was vulnerable to a selloff in the near term, especially after Bank of England policy minutes hinted more asset purchases may be needed to help Britain's ailing economy. Bank of England policymakers voted unanimously to resume quantitative easing (QE) this month, and considered injecting even more than the 75 billion pounds agreed, minutes to the BoE's October meeting showed. Sterling fell slightly after the minutes but held above the $1.5700 overnight low and recovered to hit a session high of $1.5848 on buying by a UK clearer. The pound last traded at $1.5808, up 0.7 percent on the day, with near-term resistance at $1.5853 -- the one-month high struck on Oct. 14 -- with stops cited above $1.5860. Traders said sterling's rise spurred selling by Asian central banks. "The spike higher in Cable was a good opportunity to sell," said a spot trader. "We maintain our bearish view on it given prospects of more QE, although a move above $1.5850 could see a short squeeze up to the $1.5930/40 area." In a speech on Tuesday, BoE Governor Mervyn King defended the decision to launch another round of quantitative easing, citing a slowing world economy, especially in the euro zone, as threatening the recovery of the UK economy. "The minutes reinforce the view that the BoE is really concerned about the international environment, in particular the situation in the euro zone, and they stand ready to do more QE rather than less," said Kiran Kowshik, currency strategist at BNP Paribas. "We therefore remain bearish on sterling, but with the markets trading on headlines ahead of Sunday's EU summit, it's better to have a neutral view on sterling against the dollar for now," he added, preferring a short sterling position against the Canadian dollar . Most market players had anticipated a unanimous vote for more asset purchases with a slight risk that the BoE's chief economist Spencer Dale may have voted for less than the agreed 75 billion pounds or even none at all. STOCKS HELP STERLING Gains in European stocks and optimism that major steps would be taken by euro zone policymakers at the weekend towards solving the debt crisis shored up sentiment towards the pound but market players said further upside would be limited. "It's tough to be anything other than a seller of sterling unless the risk environment improves dramatically," said Jeremy Stretch, currency strategist at CIBC. "The prevailing wind is blowing strongly in favour of more monetary stimulus," he said. Analysts said that while there are signs that progress on tackling the euro zone debt crisis will be made this weekend, a comprehensive and a durable solution was unlikely and the UK would remain vulnerable to financial tensions in Europe. The euro gave up gains against the pound on talk that the euro zone's bailout fund would not be expanded to 2 trillion euros as had been reported by Britain's Guardian newspaper. . The report was denied by two senior euro zone sources. The common currency was down 0.3 percent at 87.22 pence, hovering just near its 200-day moving average which comes
in at 87.27 on Wednesday. 15th October 2011,
Sterling reached a 1 month high vs the dollar on Friday supported by the euros rise vs the dollar. The Bank of England has once again resumed monetary easing pumping money into the economy. Peter Kinsella, currency strategist at Commerzbank commented, "Sterling should remain reasonably biased towards the downside ... the UK economy is still very weak, the UK banking sector is still on its knees and government finances are still in a tricky way....The combination of fiscal tightening and monetary looseness always ends up in a weaker currency." 13th October 2011, The pound rose to a 4 week high vs the US dollar yesterday up 1.2 percent on the day. This rise had little to do with the UK's current economic posititon. UK unemployment is at its highest since 1994. 11th October 2011, pound down vs the dollar The pound fell today vs the US dollar and the sterling pound forecast remains weak due to poor economic growth in the UK. Chief analyst at Danske Markets said, "All in all the data was a mixed bag, there was a small discrepancy between industrial production and manufacturing. But overall the trend is still for lower production and that should really not benefit the pound," 5th October 2011, Bank of England may start monetary easing It is being forecast that the Bank of England will plough in over 50 billion pounds shortly to boost the UK economy. The result is not good news for the value of the pound which fell again today and is around a 13 month low versus the dollar. Steve Barrow, currency analyst at Standard Bank said, "We are expecting the BOE to move this week with 50 billion pounds of stimulus and that could also weigh on the pound." 3rd October 2011, pounds falls versus the dollar The pound fells today as buyers sold sterling worried that the banking sector in Europe is not safe or healthy coupled with the increasing likelihood that the Bank of England will resume monetary easing quickly....possibly this week. "You'd want to be short of sterling against the dollar with the negative risk sentiment this morning, overlayed with a reasonable probability of more quantitative easing for the UK economy this week," said Jeremy Stretch, currency strategist at CIBC. "I wouldn't be surprised if sterling was trading back towards $1.5325 ahead of Thursday's Bank of England decision." The pound has not done well recently pushed down by a weak UK economy, low interest rates and the threat of further monetary easing, more pounds being printed by the Bank of England which will further devalue the pound. "There's a much higher probability that QE will be restarted in November to coincide with the BoE inflation report but weak PMIs this week will add to the case for more easing on Thursday," said Stretch. Sterling traded with slight gains vs the euro at 85.80 pence |
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