People who live in the UK send a considerable amount of money to countries in the European Union (EU) and the reverse holds true as well. For example, more than U.S. $1.71 billion was sent from the UK to France in 2016, and over U.S. $1.24 billion made its way to Germany. In the same year, around U.S. $336 million was sent from Spain to the UK. These numbers only account for personal remittances.
The GBP/EUR currency pair is unique is the way that it pairs the world’s oldest currency still in circulation with one of the world’s newest currencies.
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The use of the pound dates back to Medieval England – its use as a unit of currency began in 775 AD. In its current form, the pound sterling also serves as the official currency in the British Antarctic Territory, Jersey, Isle of Man, Tristan da Cunha, Guernsey, as well as South Georgia and the South Sandwich Islands.
The pound sterling served as the world’s leading reserve currency for more than a century. This changed after the World Wars, because of which harsh government regulations coupled with an unyielding labor market resulted in the UK’s economy to stagnate. Now, the pound sterling is the fourth most favored reserve currency globally. It is also the world’s fourth most commonly traded currency. Its share of the international foreign exchange market turnover stood at 12.8% April 2016.
|Nicknames||Quid, pound, bread, moolah, nicker, bones, |
dough, readies, folding stuff, paper
|Bank notes||GBP 1, GBP 5, GBP 10, GBP 50, GBP 100|
|Coins||1p, 2p, 5p, 10p, 20p, 50p, GBP 1, GBP 2|
The euro is on the second spot in the world’s basket of reserve currencies and it is also the second most commonly traded currency globally. In April 2016, its share of the international forex market turnover was 31.4%.
While the name “euro” was adopted in December 1995, the currency was officially launched on 1 January, 1999. Circulation of euro-denominated notes and coins began in January 2002. The euro serves as legal tender in 19 member states of the EU. Other places that use the euro include Montenegro, Kosovo, and some overseas territories of EU members. Syria and Cuba use the euro as a trading currency.
Member states of the EU that use the euro as their official currency include:
|Nicknames||Quid, aereo, pavo, ege|
|Bank notes||EUR 5, EUR 10, EUR 20, EUR 50, |
EUR 100, EUR 200, EUR 500
|Coins||1c, 2c, 5c, 10c, 20c, 50c, EUR 1, EUR 2|
Pound Sterling / Euro Historical Rates
Upon its introduction, the euro replaced the previously used European currency unit (ECU) at par and traded at over €1.40 against the pound sterling. Despite being looked at as a major step forward and the world’s next major reserve currency, the euro did not fare particularly well. By April 2000, it was trading at over €1.70 against the pound sterling.
Amid volatility, the euro managed to gain in value over the next three years. By May 2003, the euro traded at around €1.38 against the pound sterling. Form then, until September 2007, the value of the euro fluctuated largely between €1.40 and €1.50 against the pound sterling.
The global financial crisis of 2008 had an adverse effect on the value of the pound sterling. By December 2008, the euro was trading at an all time high of around €1 against the pound sterling. While analysts in the UK opined that adopting the euro would work well for the region, it was not to be. From then, until December 2014, the value of the euro fluctuated between €1.10 and €1.30 against the pound sterling.
The euro briefly traded at over €1.40 against the pound sterling in mid 2015. Impending fears about the effects of Brexit worked in favor of the euro, and by October 2016, it was trading at a little over €1.11 against the pound sterling.
GBP/EUR in the last five years
|GBP 1 =|
|1 July, 2013||EUR 1.1433|
|1 July, 2014||EUR 1.2611|
|1 July, 2015||EUR 1.4219|
|1 July, 2016||EUR 1.1836|
|1 July, 2017||EUR 1.1159|
GBP/EUR in the last five months
|GBP 1 =|
|1 March, 2018||EUR 1.1376|
|1 April, 2018||EUR 1.1401|
|1 May, 2018||EUR 1.1376|
|1 June, 2018||EUR 1.1304|
|1 July, 2018||EUR 1.1227|
What Affects GBP/EUR Rates?
Political and economic relations between the UK and the European Union have a significant impact on how the GBP/EUR currency pair performs. In recent times, uncertainty surrounding the UK’s trade balance because of Brexit has caused significant devaluation of the pound sterling, leading to volatility in the GBP/EUR pair.
Other factors that may have a bearing on the GBP/EUR currency pair include economic growth, balance of payments, monetary policies, interest rates, inflation, and investor sentiment surrounding both regions.
If you plan to send money from the UK to a country in the EU, or the other way around, pay close attention to the prevailing GBP/EUR exchange rate. Then, compare it with rates provided by the leading overseas money transfer companies.