Our currency exchange forecast

Our currency exchange forecast

Sign up

Sign up for a free account

Which kind of international payments account would you like to create?

Back to News Hub

Monitoring exchange rates and the factors that influence them should become second nature to anyone who makes international payments regularly

It’s possible to make currency exchange forecasts that can guide you when buying or selling currency or when planning regular payments with moneycorp. You may also find it helpful to delve into forecasts for popular currencies, such as ours below.

GBP to Euro: Our currency exchange rate forecast

So far, 2021 has seen pound sterling (GBP) gain steadily against the Euro (EUR), with the pair trending up by more than 4.5% since the beginning of the year. April was the only month that did not see the pair book gains. Our GBP to Euro currency exchange rate forecast takes previous months into account and looks ahead.

The GBP/EUR pair is influenced by factors such as central bank action. For example, the Bank of England raising interest rates or the European Central Bank cutting interest rates can cause movement in the currency pair. Other factors beyond the banks also influence the GBP/EUR currency exchange forecast.

This year so far has highlighted that the UK’s relations with the EU continue to affect movement, mostly in the pound. The GBP/EUR rate has also been affected by the COVID-19 pandemic and its effect on the UK economy.

The currency pair started the year at 1.1220 but fell to 1.1077 on 5th January and continued in a relatively unremarkable fashion until they climbed to an impressive 1.1803 intraday high on 5th April. Fast-forward to 14th July, and the pair rate closed the day at a satisfying 1.1720. The pair’s performance since then has been encouraging.

The GBP to Euro currency exchange rate forecast is positive, although it certainly favours the UK currency, which looks set to outperform the Euro. Some of the reasons for this include less uncertainty regarding the UK’s future, the country’s robust vaccine rollout, and the re-opening of its economy in April and May.

The EU was not as fortunate. Vaccine rollout was slow to get off the ground, while a third wave and renewed lockdown restrictions during Q2 placed additional pressure on the Euro. The currency’s performance was further hindered by Germany not lifting its COVID-19 restrictions before June. Germany is also experiencing chip shortages and supply chain issues that have caused industrial production to slow down.

That being said, the UK is seeing a sharp rise in inflation. In May, the consumer price index was at 2.1%, which rose to 2.5% in June. This surpassed the Bank of England’s target of 2%, and even though the bank said the inflation spike was temporary, it has slowed the pace of bond purchasing.

There have been hits and misses this year, but on the whole, the currency exchange forecast for the GBP/EUR pair remains positive.

How is the British Pound expected to perform against other countries' currencies?

Positivity around the performance of GBP is not limited to the currency in relation to EUR. Read our forecasts for its performance against other currencies, including the US dollar (USD) and the South African rand (ZAR) below.

GBP to USD

In keeping with the trend seen over the last couple of years, the GBP/USD pair looks set to close with gains in 2021, with the longer-term target being the $1.50 level. The Federal Reserve may continue to influence the long-term US dollar to UK pound currency exchange forecast.

The forecast may change if an unpredictable “black swan” event occurs. For example, Q1 of 2022 could see the Scottish referendum gain traction, which could have a negative effect on the GBP/USD forecast.

GBP to ZAR

An exotic currency pair, GBP/ZAR represents a developed G7 economy and an emerging market economy (EME). ZAR traditionally is a weaker currency than the pound, due in part to the South African economy being export-oriented. This means the country must offer competitive goods and services – and this, in turn, could mean a weaker GBP to ZAR exchange rate.

The pandemic is the biggest challenge facing ZAR. The third wave was larger than the first, and it led to a tightening of lockdown restrictions. Even with those challenges, our South African rand currency exchange rate forecast includes the prediction of higher commodity prices in favour of the African country.

Lockdowns led to less demand and lower imports, but South Africa’s gold and platinum exports were boosted by higher global commodity prices. For the first time in 20 years, the country had a current account surplus as its exports surpassed its imports.

A view to 2022

Looking ahead to 2022, we expect GBP to fare much better than EUR. The Bank of England is moving from a meek stance to one that is more aggressive: a trend that may affect the currency pair. GBP/EUR conceivably could reach 1.2050 by August 2022, although the pound may face challenges in the form of the end of furlough payments and other supportive initiatives.

Helping you keep an eye on currency exchange rates throughout the rest of 2021 and into 2022, moneycorp offers live exchange rates and key information on the most common currency pairs. Monitor exchange rates using our currency chart and sign up to our Daily Brief so you can stay up-to-date on the latest currency movements.

Whatever your payment needs are, we've got you covered...

Personal payments

Personal payments

With a personal account you can enjoy competitive exchange rates and low fees on all your payments.

Find out more
Foreign exchange business solutions

FX business solutions

We provide tailored services to help companies make global payments and manage their foreign exchange risk.

Find out more
Travel money

Travel money

Order your travel money for branch collection or secure it on our explorer multi-currency Mastercard®.

Find out more