Pound doing well this morning 1.181 for those considering transferring.
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It’s the fallout of the EU elections. (And a general happy feeling on a more constructive labour government re the EU).
Next up is UK wages data on Wednesday - if above 6.1% pound could rise, if below, fall. It was ever so.
But one or two places are predicting 1.19 or 1.22 shorter term. One place is suggesting 1.34 on the back of real EU / UK yields -
The headline is pound to euro undervalued by 17%
https://www.poundsterlinglive.com/eur/20374-pound-to-euro-undervalued-17-pct-says-bbh
As @larkswood12 says it’s more the € doing badly.
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£ seems to be strengthening, but for how long 
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This is because I’m heading back to Blighty in a couple of weeks’ time. It’ll go back to normal once I’m back home.
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Can you stay a little longer 
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Think they saw your post as still nudging up 
GBP / EUR has certainly broken out of the 1.15 - 1.17 range held for the last 15 - 20 odd months. Here’s three reasons why, edited from the PSL article ‘Pound Sterling’s Star Can Continue to Rise’. Also some bits from Barclays.
However, Uk inflation data is due next week - “Wednesday is a big day for the UK as the latest set of inflation numbers are due. Inflation is expected to hover around 2.0%, but this is not what the market will be reacting to. As mentioned by Pill, the inflation rate of the services sector matters. Because it is running closer to 6.0% there is only a prospect of a sustained easing in the headline rate to 2.0% if it comes down.” So sterling could give up some gains short term next week.
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Interest rate differentials
The real interest rate in the UK is 3.25%, this compares with 2.5% for the US. The larger real interest rate in the UK vs. the US is driving the GBP/USD right now, and it may only get larger.
There is now a 90% chance of a Fed rate cut in September, and the market is currently expecting more than 2 rate cuts from the US Fed this year. This compares with a 57% chance of a rate cut from the BOE in August, and less than 2 rate cuts priced in for the UK this year. -
Growth and inflation forecast
The UK’s growth outlook has improved in recent weeks. After flat monthly GDP growth in April, the May rate of GDP growth was 0.4%, defying expectations of a 0.2% increase. There is also a chance that the UK’s inflation forecast could be revised higher. CPI is expected to be 2% this year and 2.6% next year. There is a decent case for the BOE to wait until we get the new government’s first budget before cutting interest rates, which may also help the pound. -
Political risk premium
We would note that the political risk premium, which had limited GBP upside in recent years, may fall away as the Labour government enacts growth friendly policies and builds closer relationships with the EU.
This is not something that will boost the pound in the near term, and its effect on sterling is hard to measure.
However, now that the UK looks politically stable, especially compared to France and the US, the pound could attract ‘safe haven’ flows in the coming months, as the UK attracts more foreign investment, and as UK stocks start to look attractive again to foreign investors.
From a trading perspective, if GBP/USD can break above $1.30 in the coming days, then we believe that this pair could move up a level and trade back towards $1.40, the highest level since 2021.
From Barclays -
“The renegotiation of the TCA in 2026 and Labour’s declared openness to avenues such as a veterinary agreement or the mutual recognition of professional qualifications suggest scope towards a closer relationship and a further modest – but non-negligible – Brexit premium unwind,” says Lefteris Farmakis, an analyst at Barclays. The TCA - which is the trade agreement made between the EU and the UK - is due for a review in 2026.
The “significance” of the hit to the UK economy is reflected by the Brexit premium embedded into a weaker Pound, as per the above chart. In short, Pound Sterling would be far stronger were it not for Brexit. Barclays thinks the gap can close as the Pound rises.
“Consistent with the above, our new forecasts envisage sizeable gains for the pound versus the euro, with EURGBP reaching 0.80 in the coming quarters,” says Farmakis. “With growth momentum improving and carry support likely to remain in place throughout the cutting cycle, we now envisage larger (and more front-loaded) pound outperformance.”
EUR/GBP at 0.80 equates to a GBP/EUR forecast of 1.25 (for the first quarter of 2025).
The Pound to Dollar exchange rate is expected to rise to 1.33.
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Should be OK for a while now.
Honeymoon period for Starmer. Which will probably see him (and the Pound) safe through till Parliament recesses for summer.
Then still good for tbe Pound till after the US election in November. In fact could look very good indeed. As the uncertainty in the US approaching their election should push the Dollar down against…well… almost every currency, for sure, t least ubtil the US election is done.
I don’t see Euro rates having any reason to improve in that timespan anyway so no negative presure on the Pound from that direction either. It’s looking like pressure is greater on European interest rates to stay or be higher for that period, than in the UK, relative to where interest rates are now.
Though naturally the improvement to GBP FX rates etc will be claimed as the result of some action taken by the UK.
Who the next US President is and their first steps, will probably outweigh other factors in the world going forward from November. Unless there are much worse things going on by then of course.
When does Starmer have to produce a budget by? Personally if I was him I wouldn’t do it till March. Plenty can be got on with meanwhile.
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1.191 this morning.
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Revolut showing 1.189, but on the up🙂
That’s because we don’t have to find the money for an extra Bank Holiday
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Seems like the £’s plunging 
I thought it was the US that was heading for trouble, but seems like the good old £ is the fall guy!
My pension day tomorrow, hope it dosn’t go down too far before next time!
All world stock markets apparently, how did they know we need to send more money to our french account?
Nikkei took an absolute bashing yesterday, totally oversold and today bounced back. Good times to invest, but would be great if £ could gather some momentum back to the heady days
Says it all.
The pound remained not to bad against the dollar, down 0.96% on last 5 days, however the euro jumped 0.88%, so GBP/EUR down about 2%.
A currency broker rang me yesterday (catch up) and he pointed out EUR is a reserve currency so will strengthen in turmoil, GBP is a risky currency so it will drop big time in trouble. He said GBP/EUR has only been above 1.19 (or was it 1.18 ?) for 8% of the time since 2016.
The first red block on the chart was the BOE rate cut but a few hours after the announcement the rate was back to where it was before noon. But then all the GBP / EUR ‘long’ trades were unwound and there were a lot of them.
“The market’s net long swelled to a record size in July, leaving sterling vulnerable to sharp adjustments like that playing out since last Thursday’s interest rate cut from the Bank of England.”
Here was a headline just the day after the rate cut - ““Hawkish” Cut Means Pound Sterling Will Refind Winning Ways Against Euro”
Ha ha!
Mind you we have in the article " The Pound to Euro Trend is Still Higher, Goldman Sachs Says" we have
“It [BOE] will not be a dovish outlier for long,” they said of the Bank of England in a note to clients late on Friday, while reiterating a forecast for EUR/GBP to fall to 0.82 over the next year [GBP/EUR to rise to 1.2195]."
And here’s a pretty chart of the pound “slicing through its 50 and 100-day moving averages and multiple other supports on the charts, as the speculative market cut back its largest net long position.”
Above: Pound to Euro rate shown at daily intervals with Fibonacci retracements of November uptrend and selected moving averages indicating prospective areas of support.
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It seems we’re merely a firm kick in the backside away from 1.19
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Transferred some yesterday not wishing to miss it. So it should go higher now 
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Hah, I know just what you mean. It feels like I either transfer and it goes up or hesitate and it goes down.