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Euro Sterling Forecast April 2014

Euro Sterling Forecast April 2014Pound climbs 2 cents to 1.21 versus euro, as Eurozone inflation falls

Sterling hops, leaps and bounds!

The pound jumped 2 cents versus the euro in March, to a peak of 1.2125.

By contrast, the pound was at just 1.1516 in March last year. Hence, it’s since climbed +5.08%.

To put this into context, a £250,000 transfer to France would hence be worth +€14,625 more today than in March 2013.

(Please bear in mind, these are the interbank rates at the time of writing. This means the exchange rate may have changed since then.)

Sterling may climb higher, as Eurozone inflation dives

What’s more, the pound could exceed 1.2125 against the euro in April. Here’s why:

1. Inflation in the Eurozone fell to just 0.5% in March, the lowest since November 2009.

This may weaken the euro, because it brings the threat of deflation, and Japanese-style economic stagnation.

2. The European Central Bank may print huge amounts of money, to lift inflation.

This may bring down the euro, because the more money the ECB prints, the further the euro falls.

3. The Eurozone’s activities grew more slowly in March, while manufacturers cut prices.

This may make the euro fall, because it tells us the Eurozone’s factories are having trouble finding business.

With this in mind, look for the pound to rise against the euro in April!

01.04.2014

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