April 9, 2025 – Written by Tim Boyer

STORY LINK Euro to Pound Forecasts RAISED to 0.86 in Six Months at Rabobank

Foreign exchange analysts at Rabobank have raised their exchange rate forecasts for the Euro versus the Pound Sterling.

Recent US tariff concerns have driven investors towards currencies backed by current account surpluses, benefiting the Euro (EUR).

“The Eurozone’s current account surplus appears to be a source of support for the EUR currently.”

The Euro’s resilience as a temporary safe haven reflects investors’ preference to hold cash amid market uncertainty.

“Investors appear to be sitting on cash in CHF, JPY and EURs while waiting for current fog of uncertainty to clear.”

The Pound Sterling (GBP) remains vulnerable due to the UK’s persistent current account deficit, especially when domestic fundamentals weaken.

“The UK’s current account deficit can leave GBP exposed when UK fundamentals turn sour and international investors look for the exits.”

Germany’s shift towards increased public spending, notably in defence and technology, further boosts the Euro’s attractiveness.

“Investors had already been looking for fresh opportunities in Europe, so sitting on cash in EURs may seem like a reasonable position.”

Consequently, Rabobank has raised its EUR/GBP forecast to 0.85 for the six-month horizon.

“We have adjusted our EUR/GBP forecasts higher and now see the currency pair at 0.85 on a 6 month vs. compared with a previous forecast of 0.83.”

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TAGS: Currency Predictions Euro Pound Forecasts

Created on April 11, 2025

• The Euro rallied rather significantly during the trading session on Thursday, touching the 1.12 level, and even breaking above it at one point during the day.
• That being said, the euro is getting a bit overextended, and it will be interesting to see how much longer this can continue.
• While it is possible that the euro continues to scream higher against the US dollar, and it’s also possible that the trump administration would be perfectly fine with that, the reality is that eventually momentum becomes a problem yet again.

Recessionary Fears

While Germany is exiting a recession, it looks like the United States might be heading toward one. Whether or not it is a long-term recession remains to be seen, but it’s worth noting that the CPI numbers were lower than anticipated during the trading session on Thursday, and of course traders are already starting to perhaps get in the back of their mind that the Federal Reserve may have to come in and start cutting rates. If they actually do that, then it makes a lot of sense that we would see the US dollar weaken.

What’s interesting to me is that this is a market that could turn around just as quickly as it rallied, because quite frankly, if the global economy slows down, Europe is not going to be immune from it. Ironically, yields in America are rallying while the dollar is falling, suggesting that perhaps there is still a major influence on the air due to U.S. Treasury selling. Eventually, if countries wish to do cross-border transactions, they will need those US dollars. It is because of this and the structure of the Euro dollar system that I think the upside will eventually slow down.

That being said, we could go to the 1.15 level, but we could just as easily see some type of shock to the system that sends everybody back down to the 1.10 level. Ultimately, the market is certainly trying to break out, but it still got some work to do see if it has any real follow-through at this point.

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Created on April 11, 2025

• The Euro rallied rather significantly during the trading session on Thursday, touching the 1.12 level, and even breaking above it at one point during the day.
• That being said, the euro is getting a bit overextended, and it will be interesting to see how much longer this can continue.
• While it is possible that the euro continues to scream higher against the US dollar, and it’s also possible that the trump administration would be perfectly fine with that, the reality is that eventually momentum becomes a problem yet again.

Recessionary Fears

While Germany is exiting a recession, it looks like the United States might be heading toward one. Whether or not it is a long-term recession remains to be seen, but it’s worth noting that the CPI numbers were lower than anticipated during the trading session on Thursday, and of course traders are already starting to perhaps get in the back of their mind that the Federal Reserve may have to come in and start cutting rates. If they actually do that, then it makes a lot of sense that we would see the US dollar weaken.

What’s interesting to me is that this is a market that could turn around just as quickly as it rallied, because quite frankly, if the global economy slows down, Europe is not going to be immune from it. Ironically, yields in America are rallying while the dollar is falling, suggesting that perhaps there is still a major influence on the air due to U.S. Treasury selling. Eventually, if countries wish to do cross-border transactions, they will need those US dollars. It is because of this and the structure of the Euro dollar system that I think the upside will eventually slow down.

That being said, we could go to the 1.15 level, but we could just as easily see some type of shock to the system that sends everybody back down to the 1.10 level. Ultimately, the market is certainly trying to break out, but it still got some work to do see if it has any real follow-through at this point.

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Created on April 11, 2025

• The British pound has rallied rather significantly during the session on Thursday as we have seen the US dollar take it on the chin.
• Ultimately, the market is looking at the concerns when it comes to tariffs, and the US dollar has been sold off as a result.
• Furthermore, the CPI numbers came out much lower than anticipated during the trading session, so perhaps traders are starting to price in the idea of a recession in the United States.

Technical Analysis

The technical analysis for the GBP/USD pair is all over the place, and it really comes down to what your time frame is. After all, short-term traders have been whipped in both directions over the last couple of days, but longer-term traders have been buyers over the last several months. That being said, the market is likely to continue to see a lot of volatility, see you do have to be cautious with your position sizing. That being said, it is worth noting that the pair is approaching the crucial 1.30 level, which of course is a large, round, psychologically significant figure, and an area where we have seen a lot of business conducted.

I think the next couple of days will be crucial, because it will give us an idea as to what people are going to do for safety. After all, treasuries are selling off, giving higher interest rates in America, which is a bit counterintuitive. As long as that’s the case, then you will see the British pound in other currencies do quite well against the US dollar, but if traders run to treasuries for safety again, that will drive up the US dollar. As things stand right now, it feels a little bit like we are seeing a lot of capital flight from the United States, perhaps due to the tariff wars.

That being said, there’s a lot to take in here, and I do think that we have a situation where we probably try to carve out some type of range using the 1.2750 level is the bottom, and it may be the 1.30 level as the top. We could even extend that to the 1.32 level, due to the massive amounts of volatility that we continue to see an all markets, not just this one.

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EUR/USD trades at its highest level since February 2022 above 1.1400.

The USD selloff intensifies after China raises tariffs on US goods in retaliation.

The near-term technical outlook points to overbought conditions.

EUR/USD gained more than 2% on Thursday and extended its upsurge on Friday to a new multi-year high above 1.1400. Although the pair’s near-term technical outlook points to overbought conditions, investors are like to stay away from the US Dollar (USD) amid a deepening US-China trade conflict.

Growing fears over the US economy tipping into recession caused the US Treasury bonds and the USD to remain under heavy selling pressure on Thursday.

On Friday, China’s Finance Ministry announced that they will raise additional tariffs on US imports from 84% to 125% from April 12, in retaliation to the US’ tariffs on Chinese goods.

This development caused the USD selloff to intensify and triggered another leg higher in EUR/USD in the European session.

The US economic calendar will feature Producer Price Index data for March and the University of Michigan will publish the Consumer Sentiment Index data for April. Investors could ignore these data releases and remain focused on fresh developments surrounding the US -China trade war.

In case US President Donald Trump responds by increasing tariffs on Chinese goods even further, the USD selloff could continue heading into the weekend. On the other hand, the USD could stage a rebound if one of the sides takes a step back to ease tensions.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart climbed above 80, highlighting overbought conditions for the pair.

On the upside, 1.1500 (round level) could be seen as the next resistance level before 1.1535 (static level from November 2021) and 1.1600 (static level, round level). Looking south, supports could be spotted at 1.1300 (static level, round level) and 1.1200 (static level, round level).

Copper price didn’t move anything since yesterday’s trading, delaying the bullish rally by its repeated fluctuation below 38.2%Fibonacci correction level, which represents an intraday obstacle by its stability near $4.4000.

The continuation of stochastic attempts to provide positive momentum and the repeated stability above the critical support at $4.000, these factors make us keep the bullish suggestion, to expect the mentioned obstacle and holding above it, targeting extra positive stations that begin at $4.5600 and $4.6800.

The expected trading range for today is between $4.2300 and $4.5600

Trend forecast: Bullish

The EURJPY pair provided several mixed waves since yesterday, due to the contradiction between the main indicators’ positivity and the overall stability below the bearish channel’s resistance at 163.20, to notice its stability near 161.85 without achieving any of the waited negative targets.

The price needs a new negative momentum, to reinforce the efficiency of the bearish track, which might target 160.60 level and 159.60, while the price surrender to the positivity of the main indicators and its rally above the main resistance will confirm its readiness to build a new bullish track, to begin targeting several positive stations by attacking 164.10 level initially, reaching 164.85.

The expected trading range for today is between 160.60 and 162.50

Trend forecast: Bearish

April 10, 2025 – Written by David Woodsmith

STORY LINK Pound to Euro Rate Dragged Lower by EUR/USD Rally to 1.11

A EUR/USD rally past 1.11 on foreign exchange markets has dragged the Pound Sterling lower against the Euro on Thursday.

The Pound Euro (GBP/EUR) exchange rate weakened on Thursday following US President Donald Trump’s U-turn on his global tariffs.

On Thursday, the Euro (EUR) gained strength against most of its trading partners as Donald Trump announced a 90-day pause on global tariffs for all countries, except China, with a temporary 10% tariff.

In response to this shift, the US Dollar (USD) continued its downward trend during Thursday’s European trading session.

Due to the inverse relationship between the Euro and the US Dollar, the Euro capitalised on the USD’s decline, rising against the majority of its counterparts.

On Thursday, the Pound (GBP) managed to hold its ground against most of its rival currencies, even in the absence of significant economic data.

Despite the lack of major British economic indicators, Sterling maintained its strength, partly because of a decrease in expectations for an interest rate cut by the Bank of England (BoE).

With the UK bond markets stabilising, the probability of a BoE interest rate cut next week dropped from almost 100% to 78%, offering support to the Pound.

Looking ahead to Friday, the primary drivers of movement for the Pound Euro exchange rate will likely be the economic releases from both the UK and the Eurozone.

In the UK, the latest GDP figures are set to be released, and if the index reports an expected minor rebound, it could provide a positive boost to GBP exchange rates, helping to end the week on a strong note.

Meanwhile, in the Eurozone, Germany will unveil its latest inflation data.

Should the Consumer Price Index (CPI) report a downturn as expected, it could put downward pressure on the Euro, potentially weakening the single currency as the week draws to a close.

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TAGS: Euro Forecasts Pound Sterling Forecasts

April 10, 2025 – Written by Ben Hughes

STORY LINK Pound to Dollar LIVE: Soft Inflation Print Sends Sterling Past 1.29

The US Dollar (USD) lost further ground against the Euro (EUR) and Pound Sterling (GBP) following the latest weaker-than-expected US inflation data.

The Pound to Dollar rate jumped to highs just above 1.2950 before settling around 1.2910.

According to Scotiabank; “Fundamentals are shifting in the pound’s favor as markets pare back their expectations for BoE easing, offering support via wider UK -US spreads.”

It added; “the focus is now on the 1.29-1.30 congestion range that had prevailed through much of March and the first couple of trading days in April. Resistance is expected between 1.31 and 1.32 while support is expected below 1.28.”

The Pound to Euro (GBP/EUR) exchange rate continued to lose ground, however, and retreated to 1.1615 from near 1.1650 ahead of the data with overall Pound confidence still fragile.

US consumer prices declined 0.1% for March compared with consensus forecasts of a 0.1% increase with the year-on-year inflation rate declining to 2.4% from 2.8% and below expectations of 2.5%.

Core prices increased 0.1% compared with expectations of another 0.3% increase with the annual rate slowing to 2.8% from 3.1%.

According to the Bureau of Labor Statistics; “Indexes that increased over the month include personal care, medical care, education, apparel, and new vehicles. The indexes for airline fares, motor vehicle insurance, used cars and trucks, and recreation were among the major indexes that decreased in March.”

The data eased inflation fears to some extent and traders were confident in pricing in at least three Fed interest rate cuts this year.

Goldman Sachs’s Kay Haigh commented; “We expect the Fed’s initial reaction to be cautious, but the risks remain that a sharper than expected slowdown in the economy could result in a resumption of the Fed’s easing cycle.”

According to Scotiabank; “Markets surged in response to the pause news but confidence in US policymaking has been severely dented and markets will remain vulnerable to trade-related headlines while the US and China continue to slug it out.”

It added; “Markets can breathe a sigh of relief but there are still major challenges here.”

There are also still reservations surrounding the UK bond market with the 10-year bond yield traded close to 4.70% from intra-day lows around 4.65%.

According to ING; “any greater slowdown in the UK economy, which would hit revenues/raise welfare spending, would only hit gilts harder. Clearly, then, the gilt market is an Achilles heel for sterling.”

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April 10, 2025 – Written by David Woodsmith

STORY LINK Euro to Dollar Forecast RAISED to 1.14 in 12 Months at Danske Bank

Since the US tariff policy was unveiled, the Euro (EUR) has been subjected to very choppy trading against the US Dollar (USD).

EURUSD is currently trading at 6-month highs just below 1.12 handle, quoted at 1.11936 (+2.22%).

A move above 1.1280 would be a 3-year high.

Several Investment Banks Slash Dollar Forecasts, New EUR/USD Targets Published

Many investment banks have maintained a bullish stance on the US dollar over the past few months based, to an important extent, on US exceptionalism.

There was talk of EUR/USD sliding to parity, but several key banks have now shifted their view and further forecast revisions are inevitable in the short term.

Nordea, for example, commented; “We have made a complete reversal in our dollar outlook and now expect the dollar to weaken rather than strengthen.”

Goldman Sachs has shifted its view sharply; “We have made a major shift in our Dollar view after seeing the developments of the last few weeks and rethinking the likely implications of these policy changes. We now expect recent Dollar weakness to persist, particularly in DXY terms.”

Goldman has increased its 12-month EUR/USD forecast to 1.20 from 1.02 previously.

Nordea has abandoned its call for a EUR/USD slide to 1.04 and has raised its end-2025 forecast to 1.12 from 1.07.

There has been persistent optimism that the US economy would out-perform Europe with this strength also encouraging further capital flows into US asset markets and maintaining strong dollar demand.

Expectations of Trump Administration tax cuts underpinned US growth hopes while there were also expectations that US trade tariffs would tend to underpin the dollar on defensive grounds.

The dollar index (DXY) hit 2-year highs in early January on a wave of Trump trades, but has since slumped close to 8% to 6-month lows.

Reaction to the aggressive trade policy has been a key element with the dollar weakening rather than strengthening amid the slide on Wall Street.

Scotiabank noted; “An unusual aspect of the recent market volatility is that the USD has fallen in tandem with the sharp decline in US equities. The lack of haven bid for the USD amid the sharp rise in broader market uncertainty and volatility raises a valid question about whether the USD is losing its “traditional” safe-haven status.”

The bond market has also been under sustained pressure.

HSBC delved into the statistics.

It noted; “It is rare to see US 10-year Treasury yields go up, the S&P 500 decline, and the USD struggle.

According to the bank, this has happened less than 7% of times.

HSBC commented that; “it could amplify concerns how a regime shift is unfolding and a bigger USD test is coming via its structural vulnerabilities.”

The bank is less confident in its bullish dollar view; “We have pushed back against such concerns over the years given resilient US growth supporting high yields and solid foreign demand for US assets. Yet, we cannot easily brush aside the USD’s structural weaknesses, especially given the current climate.”

Goldman cited three reasons for changing its view; “the combination of an unnecessary trade war and other uncertainty-raising policies is severely eroding consumer and business confidence. Second, negative trends in US governance and institutions are eroding the appeal of US assets for foreign investors. Third, rudimentary calculations and a constant back-and-forth makes it difficult for investors to price outcomes other than high uncertainty.

Danske Bank expects a notable negative economic impact; “Trump’s tariff proposals are set to significantly increase the weighted average tariff on US imports to levels not seen since the 1920s. Taken together, the tariff measures proposed this year would amount to the largest tax hike on the US consumer since World War II. In our view, this materially increases the risk of a US recession in 2025.”

Danske Bank has raised its 12-month EUR/USD forecast to 1.14 from 1.06.

Scotiabank sees an erosion of defensive support; “The USD’s safe haven status is being eroded as market participants grapple with the aggressive shift in US trade strategy, the implications for its trading partners, and the alternative opportunities available to traditional holders of US Treasuries as a result of changing fiscal attitudes in Europe.”

Nordea focussed on a shift in fiscal policy with attempts to curb US Federal spending. It commented; “The opposite is happening in rest of the world. Europe is focused on increasing military expenditures and public spending.”

Germany has launched a EUR500bn infrastructure plan and a new coalition has been agreed.

Nordea added; “The shifting fiscal policy and economic outlook is in favor of the euro versus the dollar, which is being reinforced by capital flows in the same direction. The rest of the world is overallocated in the US compared to historical average and a normalization will lead to further net dollar sales.”

ING noted an important element of uncertainty; “second-guessing the President’s next move has been a painful process to many, and ultimately we think he will get his way with a broadly weaker dollar, albeit a story for later this year and into 2026.”

The bank will adjust its forecasts shortly and is likely to downgrade dollar forecasts.

According to SocGen; “The global economy’s best hope is that this trade war is short. The alternative outcome is weaker growth for everybody, and a sharp slowdown in capital flows to the US, which would trigger a significant fall for the dollar.”

UBS has a March 2026 EUR/USD forecast of 1.14.

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TAGS: Currency Predictions Euro Dollar Forecasts