Pound to Euro exchange rate is set to soar against the euro in 2017 as political unrest intensifies across Europe.
Britain’s currency is on its way to rise significantly against the sliding euro, according to experts.The EUR/GBP rate will fall to 0.8, down from the current 0.85. That’s the prediction from Xtrade’s Chief Analyst Paul Sirani. The range of forecasts for the pound to euro exchange rate is the widest it’s been in a decade – from 0.73 – 1.00.
According to Xtrade, that range is owed to unprecedented risk in the political climate of the UK and the Eurozone. Mr Sirani said: “This dispersion is largely a function of today’s unprecedented political turmoil, whether you view Brexit’s tortured implementation path or the European political populism threat as the greater risk.
“Our view is that the muddle and uncertainty plaguing the British process is less threatening than the real and growing risks facing the continent, so look for sterling strengthening to some 0.8 £/€.”
Uncertainty in the wake of the Italian referendum earlier this month caused the euro to dip. Elections in France and Germany in 2017 could take a similar toll on the European Union’s currency – according to analysts at euroexchangeratenews.co.uk.
XTrade’s forecast is supported by comments from Nordea Market’s FX strategist Aurelija Augulyte, who predicts that next year will see British currency strengthen.
She told Pound Sterling Live: “2016 was a disaster for the GBP, as the unexpected Brexit vote knocked it off most since the Lehman crisis.
Although the vote to leave the European Union and subsequent indication from Prime Minister Theresa May that it will be a hard Brexit have weakened the pound, Augulyte says the worst is over.
She said: “Now that the ‘hard’ Brexit has become a market’s baseline, should we shift towards a softer form of Brexit – avoiding an exit ‘cliff’ with a transition agreement – the markets will be relieved.
“It could happen as British PM May will deliver the Brexit plan before actually triggering Article 50.”
The strategist also thinks Brexit fallout will be overshadowed by Donald Trump becoming President in the United States and the increasing political risk in the Eurozone. Article by the express.