The Pound to Euro (GBP/EUR) exchange rate has had an interesting year, and for anyone with a currency requirement, it’s often been hard to predict how the currency pair might fare. Looking back on 2018, GBP/EUR appears to be approaching the end of the year at similar levels to how it began. The Pound to Euro currency pair might have hit highs of 1.15, almost breaching 1.16, it’s also dwelled at lows of 1.10, verging on dropping into 1.09 territory.
Pound to Euro (GBP/EUR) Exchange Rate 2018: Brexit and Politics
2018 began with levels of 1.12 in January, and as markets approach year-end, GBP/EUR resides at around 1.11, waiting to surge higher on some good Brexit news. However, there’s a lot weighing on the Pound. While UK domestic politics have been unstable since the Brexit referendum, snap elections, Conservative Party MPs quitting, Brexit Secretary resignations, and votes of no confidence have done nothing positive for the Pound. The Eurozone has issues of its own, with German Chancellor Angela Merkel finding support ebbing, and Italy’s populist government coming to blows with the EU over its budget.
Things look like they could become more volatile for the Euro too, with the European Parliament elections approaching fast and predictions that populist groups will gain more favour. Things may become clearer in Italy too as voters will see the ruling coalition parties run separately, and see their different agendas.
GBP/EUR Exchange Rate 2019 Forecast
One of the main things to influence the Pound to Euro (GBP/EUR) exchange rate in 2018 was Brexit, and looking ahead, it appears that Britain’s exit from the EU could be the main driver in 2019 too. Brexit day is fast approaching on March 29th, and there have been suggestions the transition period could be extended, another referendum could be called, or a no-deal Brexit might go ahead.
The UK’s departure from the EU without a deal could be detrimental for the Pound. Economic data both from the Eurozone and the UK have also showed a slowdown of late, which doesn’t bode well for either currency. Investors may want to watch the Eurozone economy closely given the European Central Bank (ECB) has just tied up its monetary stimulus, while experts will also be closely following the effect of Brexit on Britain’s economy.
It’s going to be an unpredictable year ahead, but the Pound to Euro exchange rate is almost certain to experience some volatility, mainly on account of politics.