{"id":280749,"date":"2026-02-04T18:59:09","date_gmt":"2026-02-04T18:59:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/280749\/"},"modified":"2026-02-04T18:59:09","modified_gmt":"2026-02-04T18:59:09","slug":"pound-sterling-near-term-outlook-against-euro-and-dollar-still-constructive","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/280749\/","title":{"rendered":"Pound Sterling Near-term Outlook Against Euro and Dollar Still Constructive"},"content":{"rendered":"

\ud83c\udfaf GBP\/EUR year-ahead forecast: Consensus targets from our survey of over 30 investment bank projections. Request your copy<\/a>.<\/p>\n

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Image \u00a9 Adobe Images <\/p>\n

Pound sterling retains a constructive near-term outlook against both the euro and the dollar.<\/p>\n

Supportive global conditions continue to underpin demand for the British pound, with a global\u00a0equity rally broadening out from a concentrated list of technology stocks.<\/p>\n

The pound to euro rate (GBP\/EUR) is particularly sensitive to such conditions and has risen to 1.1588, leaving it just short of the 2026 high set a day earlier at 1.1597 and extending a well-defined post-November uptrend.<\/p>\n

The pound to dollar rate (GBP\/USD) surged strongly in late January, reaching its highest level since 2022 at 1.3850 before paring gains and unwinding overbought conditions.<\/p>\n

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Gains\u00a0are closely linked to<\/a> favourable global macro conditions and the steady rise in equity markets.\u00a0Crucially, the equity rally is no longer concentrated in a narrow group of large technology stocks, but is showing broader participation across sectors and regions:<\/p>\n

In the United States, the diverse Russell 2000 rose while the S&P 500 fell, even though around 55% of S&P 500 constituents finished higher on the day, highlighting that weakness was driven by a small number of heavyweight names.<\/p>\n

Globally, that rotation has brought renewed attention to markets with a more traditional sector mix, helping the UK\u2019s equity market outperform.\u00a0The FTSE 100 is up around 6% so far this year, placing it among global leaders and reinforcing the pound\u2019s positive correlation with improving risk appetite.\u00a0<\/p>\n

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Above: GBP\/EUR is a ‘risk on’ play at present, tracking global equity markets higher.<\/p>\n

For GBP\/EUR, the uptrend established since November remains both clear and technically robust.<\/p>\n

A simple projection of recent momentum points toward levels around 1.1650 by month’s end if current conditions persist.<\/p>\n

That said, following recent gains, a period of near-term consolidation or a shallow pullback toward the 1.1560 to 1.1540 area would not be unusual.<\/p>\n

\ud83c\udfaf GBP\/EUR year-ahead forecast: Consensus targets from our survey of over 30 investment bank projections. Request your copy<\/a>.<\/p>\n

In GBP\/USD, the early-February pullback already appears to have run its course, with buyers emerging around 1.3650 to stabilise the pair.<\/p>\n

Sterling\u2019s rise to multi-year highs against the dollar in late January and multi-month highs against the euro earlier this week reflects a broader bullish global macro backdrop.<\/p>\n

That environment is closely linked to the US administration\u2019s desire to run the economy hot, using a combination of fiscal and monetary levers.<\/p>\n

\"\"<\/a><\/p>\n

Above: GBP\/USD benefits from the U.S. administration’s ‘weak dollar’ policy.<\/p>\n

Strong fiscal stimulus through tax cuts, expectations of lower Federal Reserve interest rates and tolerance for a weaker dollar are all part of that mix.<\/p>\n

\u201cThe US administration is planning to run the economy hot,\u201d says Dario Perkins, economist at TS Lombard.<\/p>\n

\u201cAll macro policy levers are in play – fiscal, monetary, credit and bank deregulation,\u201d Perkins says.<\/p>\n

\ud83c\udfaf GBP\/USD year-ahead forecast: Consensus targets from our survey of over 30 investment bank projections. Request your copy<\/a>.<\/p>\n

That combination is typically bullish for equities and bearish for the dollar, a backdrop that favours steady upside in both GBP\/EUR and GBP\/USD.<\/p>\n

Looking further ahead, strategists see scope for equity markets to perform well despite an elevated risk environment.<\/p>\n

\u201cWe back another \u2018brave new world\u2019 year in 2026, with geopolitical dynamics and fiscal dominance driving price action across all financial markets,\u201d says Jonathan Stubbs, analyst at Berenberg Bank.<\/p>\n

\u201cAccess to strategically important industries and resources will be key, and despite the heightened risk environment, we expect a decent year for equities,\u201d Stubbs adds.<\/p>\n

In the near term, attention will turn to the Bank of England, which is set to dominate sterling discussion.<\/p>\n

However, major policy surprises are not expected, suggesting any reactive moves in the pound are likely to be faded.<\/p>\n

With the broader macro environment remaining supportive, downside risks for sterling appear well protected against both the euro and the dollar.<\/p>\n","protected":false},"excerpt":{"rendered":"\ud83c\udfaf GBP\/EUR year-ahead forecast: Consensus targets from our survey of over 30 investment bank projections. Request your copy.…\n","protected":false},"author":2,"featured_media":280750,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[72,61,60],"class_list":{"0":"post-280749","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-ie","10":"tag-ireland"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/280749","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=280749"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/280749\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/280750"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=280749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=280749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=280749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}