British Pound, Euro And Dollar Exchange Rate Forecasts Updated For 2016 -2017

Published: 20 Oct 2017 21:24

pound to euro exchange rate forecast

Lloyds Bank Foreign Exchange Predictions: Latest May 2016 edition of their IFO sees analysts adjust their British Pound to Euro year-end 2016 exchange rate forecast from 1.31 to 1.36, Sterling-Dollar conversion to 1.52 from 1.47 and leave Euro to Dollar at 1.12.

Lloyds Bank released their International Financial Outlook for April 2016 which we note revises higher their British Pound to Euro exchange rate forecasts for year-end 2016 from 1.31 to 1.36.

This suggests that the GBP/EUR conversion will rise compared to today's current level, which is trending around 1.2667. (See below for live inter-bank rates)

Analysts at the bank all noted that the Pound to Dollar exchange rate is predicted to reach 1.52 over the course of the year (compared to today's 1.4423).

In relation to the Euro to Dollar conversion, their call remains unchanged at 1.12 by 2017 (in comparison to today's 1.385)

Other Pound Sterling / Currency Exchange News

Latest Pound/Euro Exchange Rates Today

On Thursday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.855

At time of writing the pound to euro exchange rate is quoted at 1.17.

The live inter-bank GBP-USD spot rate is quoted as 1.263 today.

FX markets see the pound vs swiss franc exchange rate converting at 1.138.

Please note: the FX rates above, updated 28th Mar 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.

Central Bank Interest Rate Predictions (Bank of England, ECB, FED)

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Lloyds suggest there will be a delay before the next FED interest rate hike in 2016:

"The main change we have made this month is to push out the next US policy rate hike to September from June."

"This reflects ongoing caution among policymakers and recent mixed signals from the US economy."

"Our US policy rate forecasts, nevertheless, still contrast with market expectations, with the next hike not fully priced in until next year."

The Bank of England policy outlook remains unchanged according to the analysts at the UK bank:

"The Bank of England MPC will be alert to signs of slowing economic activity in the first half of the year, and is expected to keep policy firmly on hold at 0.5%."

"We maintain our forecast for the first hike in late 2017."

In terms of the European Central Bank, Lloyds forecast no change in the foreseeable future:

"In the eurozone, the ECB is focusing on implementing policy measures announced at the March meeting and further stimulus is not expected for now."

Euro to Dollar Exchange Rate Outlook

According to their latest research, analysts at the bank see the euro to dollar exchange rate rising to a fair value by 2018:

"Following recent US data, we have pushed out our expectation of the next interest rate rise to September. The shift in our rate view, combined with the risk of a broader based strengthening of the EUR , has led us to revise up our forecast for June, to 1.14. Subsequently we expect the currency pair to reach our estimate of fair value, around 1.18, by end -2017"

UPDATE 10/05/2016:

Bettering forecast, the UK’s visible trade deficit narrowed from -£11.4 billion to -£11.2 billion in March to suggest that the negative impact of ‘Brexit’ uncertainty might have been overstated.

Consequently the British pound (GBP) exchange rates trended higher against rivals, capitalising on weaker German Industrial Production figures and declining expectations of an imminent Fed interest rate hike.

The outlook of the UK economy diminished further in response to March’s UK Industrial and Manufacturing Production figures, dragging the Pound (GBP) lower on Wednesday.

For the third time since 2008 the UK’s industrial sector slipped back into a state of recession, a situation which could stand to worsen as referendum uncertainty and the steel crisis continue to weigh on the economy.

UPDATE 11/05/2016:

The near-future is set to bring the announcement of impactful UK and US data releases

In the UK’s case, movement is expected from tomorrow’s Bank of England (BoE) interest rate decision and its accompanying minutes, which may well be dovish. (source)

The US’s contributions will see the US Unemployment Claims (source). Also speeches from Fed officials Loretta Mester, Eric Rosengren and Esther George.

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