Investing.com – The euro-to-pound exchange rate is expected to remain within its recent trading range as the budget-related risk premium has been priced out of the British currency, according to a new report from UBS released Thursday.
UBS analysts noted that more upbeat economic data from the United Kingdom has provided additional support for the pound sterling in recent weeks, contributing to the currency’s relative stability against the euro.
The Swiss banking giant pointed out that with the European Central Bank maintaining its current policy stance and Eurozone economic data remaining “uneventful,” the euro has had minimal impact on the currency pair movements.
UBS forecasts that the EUR/GBP exchange rate will stay within the 0.86-0.89 range, while gradually moving toward the upper end of this band by the end of 2026.
The bank also highlighted that given the yield differential currently favors the British pound, UBS anticipates similar total returns for both currencies despite the expected gradual shift in the exchange rate.
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