Pound to Euro Forecast: 1.2006 in Three Months

Goldman Sachs have raised their forecasts for the British Pound against the Euro following a strong start to 2022 for the UK currency.

GBP/EUR looking to hold above 1.1950, with supports near 1.1954, 1.1920, 1.1864.

Researchers at Barclays describe the British Pound's recent performance as "resilient" as they anticipate the currency to continue outperforming key peers over coming weeks and months.

GBP/EUR could attempt a recovery of 1.2000 but is facing resistance at 1.1998, 1.2015 & 1.2051.

Pound Sterling has already breached Credit Suisse's forecast target against the Euro, leading the Swiss bank to raise a new target and affirm their bullish stance on the UK currency against its continental rival in 2022.

Profit taking may prompt setback, test of 1.1830, as consolidation could follow holiday rally from 1.17.

The outlook for the British Pound is not as poor as current investor sentiment would suggest, says a leading Wall Street investment bank.

GBP/EUR supported at 1.1741 & 1.1683, upside bias seen to prevail above 1.1683.

The Pound to Euro rebound risks being undermined by new Covid restrictions, the weight of which could potentially act to pull Sterling back near to 1.1550 this week or thereafter.

The Pound to Euro exchange rate is expected to appreciate in coming months according to foreign exchange analysts at Commerzbank, the Frankfurt based lender and global financial services provider.

The Pound to Euro exchange rate has unwound much of its Q4 rally and risks slipping back toward early November’s lows in the 1.1630 area if the market continues to eschew risk currencies in favour of safe-havens over coming days.

GBP/EUR supported at 1.1749 with scope for recovery if global markets stabilise & safe-haven demand ebbs.

"We are not expecting the pound to strengthen against either the dollar or the euro. In fact, the risk is that it weakens against both" - Capital Economics.

GBP is predicted to come under pressure against the Euro and Dollar ahead over coming weeks and months, with a more sustained recovery only likely in the second half of 2022.

GBP/EUR supported near 1.1838 & 1.1783, meets resistance at 1.1950, scope for 1.20.

HSBC says 2022 will see the Pound deliver an uninspired performance against the Euro and head lower against the Dollar.

GBP/EUR has begun to pare early November losses and could attempt to regain a toehold above 1.17 over the coming days.

"There's growing talk of the EU suspending its trade deal with the UK. But fresh Brexit uncertainty may not have as big a market impact as perhaps presumed" - ING.

"We doubt that GBP will profit much from early rate hikes" - Swedbank.

GBP/EUR starts the new week hobbled by the market response to last week’s Bank of England (BoE) monetary policy decision but it could be likely to stabilise above the nearby 1.1650 level over the coming days, albeit with only limited upside potential.