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Currency Strength Exchange Rates | Market Overview


December 24, 2020
When doing trades in the stock-market, understanding the pound to euro exchange rate helps you gain a profitable edge when trading in the currency market.
Currency Strength Exchange Rates | Market Overview

Updated!

Overview

The concept of currency strength essentially refers to the monetary purchasing power of a country’s currency. In this regard, it will be determined by how it interacts with certain significant factors like the interest rates of a central-bank, balance of trade, growth and inflation.

Therefore, as a beginner, when looking at the trading market overview, it is important to consider the value, utility and reserve factor. Today, the USD is the strongest globally, which is why most countries use it as a reserve, making the US economy the largest economy in the world.

Most Traded Currencies Globally

Some of the most traded currencies globally include:

  • The US-Dollar
  • The Swiss Franc
  • The Canadian Dollar
  • The Great British Pound (GBP)
  • The Japanese Yen
  • The Australian Dollar

Understanding Currency Strength: Pound to Euro

Currency strength is determined when the currency’s value is more than that of another country’s. If traders used EUR to pound currency converter and realized that the Pound-sterling is equivalent to half a euro, it will mean the Euro exchange is stronger than the Pound.

The U.S dollar is regarded as the legal tender with the greatest strength. It can also be referred to as a safe haven to get through an economic disaster such as a stock market crash.

Among the benefits of living in a country that has a strong currency is that you can purchase imported goods at lower prices. Countries whose currencies are weaker also have an advantage as their products will always be in high demand.

The Correlation between Pound and Euro

best currency strength guide for trading forexWhile investing, it is usually advisable to take a bank that offers a higher British Pound to Euro exchange rate. If you wish to convert euros to Pound, you will need first to check out the Euro to Pound today’s rate.

Exchange rates change from time to time throughout the day. You must understand today’s exchange rates will not be the same as tomorrows. These rates inform you of the amount of money you will receive once you decide to exchange. For instance, the Pound to the euro exchange rate.

Calculating Pound to Euro Exchange Rate

According to experts, reading and calculating exchange rates of currencies can be hard, especially for traders dealing in the stock market. You can get Sterling-pound to EUR exchange rates in commercial banks and websites.

Travelers can also get prices around airports. This is easier for travelers who wish to exchange their travel money to know the right places to go. It is also advisable to look out for exchange rates in platforms specifically specialised in trading. This will help in getting real-time data.

What is the highest Pound to euro rate ever?

Analysts contend that the highest record ever set of Pound to euro rate was on May 3, 2000. This record high meant that one Pound was equivalent to €1.752 against the Euro. This record came about with the launching of the Euro in 1999. It performed poorly to the Pound, which was well established by then.

Will the Pound rise against the Euro?

The British Pound is projected to appreciate following positive extensive trade talks between the European Union and the U.K. The decision of E.U. choosing to extend negotiations concerning their future relationship spiked Pound to Euro exchange rates.

According to analysts, keeping an eye on the evolution of the COVID-19 pandemic might be the key to the sterling Pound to rise against the EUR. They suggest a vaccine-driven recovery will be of great benefit to the U.K. economy than other countries’. They further suggest that once vaccinations are done on a wider scale, it will bring GBP among the top priorities of investors looking for beneficial assets. This is because business assets will have been lifted.

Analysts claim that this rise is expected to benefit the U.K. as it among the first countries to roll out a COVID-19 vaccine.

Lowest Pound to Euro Rate Ever

The weakest position ever held by the Sterling pound in relation to the EUR was €1.02 and this was back on December 30, 2008. This came about during the worldwide financial crisis and it was during this time, the U.K. banking system was very fragile.

Is the Pound Likely to Get Stronger?

With the current forecast levels, the British Pound is likely to remain weak. This is due to the following reasons:

  • The coronavirus pandemic is worsening, which leads to straining of public health systems.
  • Prolonged global recession could result in fewer trade activities, low demand in British goods leading to a weak economy.
  • The British economy faces a recession and inflation and picks up gradually, which may result in potential interest rate cuts.
  • Brexit deal leads to so many worries and in the end process, it devalues the GBP against other currencies.

Is now a Good Time to Buy Euros?

According to a recent study, some non-euro currencies are weaker than they were in summer 2019, but now the EUR is up by more than 10% than in August 2019. This means that now it could be a good time to buy EURO.

Exchange Rates for pound to Euro

Exchange rates are always changing over the week since people are constantly trading. According to live updates of Pound to euros, the Pound is stronger compared to the Euro exchange. For instance, one GBP to EUR while using EUR to GBP is equivalent to 1.02 euros meaning the sterling Pound is reliable than the EUR according to exchange rates.

Effects of Brexit on Pound to Euro Rates

The Brexit referendum has had a huge impact on Pound to Euro as the Pound’s value dropped against the value of the Euro. The Pound took a significant 16% fall against the Euro following the Brexit referendum. This includes a 6% fall on the day the results were announced. This large fall came about due to the uncertainty created by Brexit. In the last recent years, the Pound to Euro rate has always been between €1.10 and €1.20, according to analysts.

Ever since Brexit, The highest the Pound has ever reached is €1.2046 and that was on February 18 2020. The lowest it has ever been was €1.0681 back in March 23 2020.

Pound to Euro 20-Year History

GBP/EUR started in 1999 at above just €1.40 level. In the first few years, there were doubts concerning the credibility of the EURO. The Pound gained value to the Euro. One year after the Euro was launched, the Pound’s value rose to €1.752, which is the all-time high.

The Pound was back to its usual launch rate of €1.40 by 2003 because the Euro was well established by now. Between 2003 and 2007, GBP/EUR exchange rates were between €.1.40-€1.50. This was a very rare stability period. When the global financial crisis came about in 2007/2008 took a nosedive as the U.K. had to provide £500 billion for support as a way of preventing the British banking system from collapsing.

As December 2008 was coming to an end, the Pound realized an all-time low of €1.02. Between 2013 and 2015, the Euro took a heavy loss as debt issues started emerging with Portugal, Greece, Spain and Italy. Mostly known as ‘PIGS’. At this moment, E.U.’s future viability came into question.

In February 2016, U.K. announced the Brexit referendum. This led to the Pound taking a steep descent. On announcing the ‘shock’ results in June 2016, the Pound experienced a record one-day fall of 6.02% against the Euro. Since the Famous Brexit vote, the Pound has been rising slowly against the Euro until the COVID-19 pandemic brought about another sell-off.

Currency Strength Conclusion

With the ongoing economic crisis, the GBP/EUR graph registers a sharp decline and this can indicate to traders or investors to consider trading GBP EUR with caution.

For the best Pound to euro exchange rate, you can check our charts. However, it’s important to check exchange rates daily as they are changing constantly.


Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.

Risk Warning: Our products are traded on margin and carry a high level of risk and it is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved.


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