June 22, 2024

EUR/GBP: Sterling may struggle to reach 0.84 year-end forecast

EUR/GBP will trend lower in the coming months

In line with the euro, the pound has fallen against the dollar since the start of the conflict in Ukraine. Economists at ANZ Bank expect a good performance of the British pound against the common currency in the coming months.

Better odds at crosses

“The UK’s geographic proximity to the uncertainty in Europe means that sterling will continue to be affected by the course of the conflict. However, the prospects for sterling are brighter at Crosses.

“The BoE is primarily focused on inflation and we expect more targeted monetary tightening. On the positive side, the heavy weight of the services sector in the economy will help lift it from energy-related weakness in isolating manufacturing; demand for labor is very strong, and investment in businesses and government is increasing “.

“Our forecast expects the UK to do better than many other major economies this year.

Against the euro, we expect more modest gains in the coming months.

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