GBP/EUR Forecast Overview for H2 Released, Median Point Ticks Higher

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Pound Sterling Live and Corpay have launched the Pound-Euro forecast guide for the year's second half.

The guide gives an important snapshot of what the consensus of economic analysts at the world's biggest and most important investment banks and financial institutions are expecting.

The document - available as a free discretionary download - shows the median and mean forecasts for several key exchange rates.

For the Pound-Euro exchange rate, the midyear compilation shows an uplift to the end-2024 median forecast, a reflection of Pound Sterling's relative outperformance amidst the delayed start to the Bank of England's interest rate cutting cycle.

"We further believe that the EUR/GBP 3M-6M outlook would depend on the outcome of the French rather than the UK election. Key in that would be the FX impact of wider government credit spreads to Bund yields after the French vote," says Valentin Marinov, Head of G10 FX Strategy at Crédit Agricole.

Above: Only the USD has outperformed the GBP in 2024.

Marinov says some negatives related to the French and UK votes are in the price of GBP/EUR so that the pair may not rise significantly above recent highs in the event of an RN (Marine Le Pen's party) victory and/or a hung parliament in France.

The mid-year edition of the Pound Sterling Live / Corpay forecast compilation shows that since the start of the year, the end-2024 median forecast for the Pound to Euro exchange rate has shifted up by 200 pips.

The median forecast is a particularly useful tool when establishing a foundational baseline for those watching the market. It helps those with deliverable FX needs - i.e. those looking to make international payments - gain an understanding of future market direction. For example, are current levels exceeding or undershooting the value that most currency specialists think?

Interest also comes from the data set's highest and lowest point forecasts. The analysts who derive them aren't content to follow the herd and are prepared to make the big calls.

The highest expected forecast for year-end remains unchanged, while the lowest forecast point has been raised by 400 pips since the start of the year.

Given the Pound's run higher over the year (+2.67%), it could be those analysts who placed their forecasts well above those of the median that will prove the most accurate.