The euro is doing something that surprises most people when I explain it: the European Central Bank is about to raise rates, yet the euro has slipped to a six-week low against the dollar. As I write at the end of May, EUR/USD trades around 1.1668 and GBP/EUR sits near 1.153 (EUR/GBP around 0.867). Here is my updated read on where the euro is heading against both the dollar and the pound through the rest of 2026, and why the 11 June ECB decision matters more than anything else on the calendar.
The single biggest near-term driver is that 11 June meeting, where the market now prices a 25bp hike at roughly 90%. My base case is for the euro to trade in a 1.15–1.20 range against the dollar and 1.13–1.17 against the pound over the next six months — firm, but capped by a dollar that has refused to roll over. You can check the live EUR to USD rate or EUR to GBP rate for real-time prices, or request a quote to talk it through with a specialist.
What’s happening with the euro right now?
EUR/USD has pulled back from its January high of 1.2019 to around 1.167, testing the lower end of the range it has held all year. The low for 2026 so far was 1.1435 on 15 March, and the average has been about 1.17. So the euro isn’t weak — it’s range-bound, and right now it’s sitting toward the softer end of that range.
The reason is mostly the other side of the pair. The dollar has firmed in May rather than fading as many forecasters expected, on sticky US inflation and an unsigned Iran ceasefire. That has pressed EUR/USD lower even as the euro’s own story has turned more positive. For the full dollar picture, see my USD forecast 2026.
Against the pound, the euro has been remarkably stable. GBP/EUR has spent the whole of 2026 inside a tight 1.14–1.16 band, anchored by the wide gap between UK and eurozone interest rates. That gap is now starting to move, which is the more interesting part of the story.
Why is the ECB about to hike when oil has just collapsed?
This is the question I get most from clients, because on the surface it looks contradictory. Brent crude has fallen to around $92 a barrel — down roughly 19% in May, its worst month since the pandemic — as the US and Iran moved toward a 60-day ceasefire. If the energy shock is unwinding, why would the ECB tighten?
The answer is that the inflation has already landed. The energy spike pushed eurozone headline inflation to 3.0% in April, with core at 2.2%, and May flash readings showed prices still accelerating in France, Italy and Spain even as Germany cooled. The ECB held its deposit rate at 2.00% on 30 April but made clear it would not look through that shock, warning that upside risks to inflation and downside risks to growth had intensified. It is leaning hawkish even with growth soft: the IMF trimmed its 2026 eurozone growth forecast to 1.1% in its April outlook.
The market has taken the ECB at its word, and the published account of the April meeting shows some policymakers would have supported a hike there and then. Money markets now price a 25bp hike to 2.25% at the 11 June meeting at roughly 90%, with a second hike priced by September and a third more likely than not by year-end. That is a striking turnaround from late March, when the consensus expected the ECB to stay on hold through the third quarter.
In my view, the key point is this: the ECB is now reacting to inflation that is already in the data, not to the oil price on any given day. Falling crude takes the pressure off the next leg of inflation, but it does not undo the hike the market has already priced for June. The 11 June meeting also brings fresh ECB staff projections — the first since the Iran shock — which is why it carries real two-way risk. A hawkish hike could push EUR/USD back toward 1.18; a surprise hold or dovish guidance could pull it toward 1.15 within hours.
My EUR/USD forecast for the next six months
My honest view is that EUR/USD is range-bound with a modest upward bias, rather than on the verge of a breakout. Near term, the euro is capped by dollar firmness — the pair has struggled to hold above 1.17, and a firmer dollar on US inflation is the main thing keeping it there. An ECB hike on 11 June is largely priced, so the bigger swing factor is what the dollar does.
For EUR/USD to climb back toward 1.20, I’d want to see two things line up: the ECB delivering its hike with hawkish guidance, and clear signs that US inflation is cooling enough for the Federal Reserve to ease later in the year. If both happen, the path of least resistance is a stronger euro into the back half of 2026. If the dollar stays firm, EUR/USD holds the middle of its range. Here are the ranges I’m working to.
These are wide on purpose. With a live ECB decision, an unsigned ceasefire and a dollar that hasn’t behaved as forecast, a single point estimate would give false comfort. The euro’s 2026 range against the dollar has already run from 1.1435 to 1.2019 — a 5% spread — and most of the risk this summer sits around scheduled central-bank dates.
What about the euro against the pound?
GBP/EUR is trading around 1.153, with the pair held in a tight corridor all year. The anchor is the interest-rate gap: the Bank of England’s Bank Rate is 3.75% against the ECB’s 2.00% deposit rate — a 175 basis-point gap that has kept sterling supported.
That gap is now set to narrow. If the ECB hikes on 11 June while the Bank of England holds at 3.75% on 18 June — and Governor Bailey has signalled the BoE is in “no hurry” to move — the gap closes by 25bp and the euro should firm modestly against the pound. The consensus among the banks is for GBP/EUR to hold above 1.15 through the year, drifting gently lower as that gap narrows. For the sterling side of the equation, see my pound to euro forecast 2026.
For anyone buying property in the eurozone, this is where timing bites. A 5% move on a €500,000 purchase is roughly £22,000 — real money, and far more than the difference between brokers’ rates. In my experience working with buyers in Spain, France and Italy, the risk that actually costs people is an unhedged exposure sitting open across a central-bank meeting, not a fraction of a cent on the spread.
Is it a good time to buy or sell euros?
A useful way to judge it is to look at where the rate sits against its own recent history. EUR/USD near 1.167 is toward the lower end of its 2026 range, and GBP/EUR near 1.153 sits in the middle of its year-long band. Neither is at an extreme, which usually means the bigger driver is the event in front of you rather than the level itself.
If you’re buying euros — funding a property purchase, paying a eurozone supplier — a stronger euro costs you more. With an ECB hike largely priced for June, the risk is that good news for the euro is already partly in the rate; but a hawkish surprise could still push it higher quickly. Waiting for a better level carries its own risk in both directions.
If you’re selling euros — bringing eurozone proceeds back to sterling or dollars — a firmer euro works in your favour, and the current level is reasonable against the year. To put numbers on it, €300,000 converted at 1.153 GBP/EUR yields about £260,190; the same sum at 1.130 yields about £265,487 — a difference of roughly £5,300 on one transfer, simply from where GBP/EUR sits.
This is where the tools matter. A forward contract lets you fix today’s rate for a payment up to twelve months ahead at no extra cost — useful if you simply want certainty across the 11 June ECB decision. A rate alert lets you set a target level and be notified if the market reaches it, and splitting a large amount into tranches averages out your timing rather than betting everything on one day.
If you’re weighing it up, I’ve written more on whether now is a good time to exchange money, and you can set a target with our exchange rate alerts.
A note from experience
The most expensive mistake I see isn’t picking the wrong moment — it’s leaving a large exposure open across a central-bank decision in the hope of a slightly better rate. Intraday moves of 1–2% around an ECB meeting are not unusual, and on a property purchase that can swing the cost by thousands.
A recent example: a client completing on a home in Spain, with the balance due a week after the June ECB meeting, was understandably nervous about what a hike and a fresh set of projections might do to GBP/EUR. Rather than gamble on the outcome, they fixed the rate with a forward contract, removed the uncertainty, and completed on schedule. That’s usually the right instinct — securing a sensible rate and getting on with your plans, not trying to call the exact top or bottom.
Frequently asked questions
Is the euro going up or down in 2026?
The euro is forecast to be firm but range-bound through the rest of 2026, with a modest upward bias. My base case is EUR/USD in a 1.15–1.20 range and GBP/EUR in a 1.13–1.17 range. The euro currently sits toward the softer end against the dollar (around 1.167) and the middle of its band against the pound (around 1.153), with the 11 June ECB decision the dominant near-term driver.
Will the euro get stronger against the dollar in 2026?
Possibly, but it is capped near term by a firm dollar. EUR/USD trades around 1.167, below its January high of 1.2019. For a sustained move back toward 1.20, the market would likely need the ECB to hike with hawkish guidance on 11 June and clear signs that US inflation is cooling enough for the Fed to ease later in 2026. The base case range for the next six months is 1.15–1.20.
Will the euro get stronger against the pound?
Modestly, if the rate gap narrows. GBP/EUR trades around 1.153, and the 175 basis-point gap between the Bank of England (3.75%) and the ECB (2.00%) has kept sterling supported. An ECB hike on 11 June alongside a BoE hold on 18 June would narrow that gap and could nudge the euro firmer, easing GBP/EUR toward the 1.13–1.15 area. The consensus is for GBP/EUR to hold above 1.15 through the year.
When is the next ECB interest rate decision?
The next ECB monetary policy decision is on Thursday 11 June 2026, with the announcement at 13:15 BST and President Lagarde’s press conference at 13:45 BST. The deposit rate is currently 2.00%, held at the 30 April meeting, and markets price a 25bp hike to 2.25% on 11 June at roughly 90%. The June meeting also brings new ECB staff projections, which makes it especially market-sensitive.
Should I buy euros now or wait?
That depends on your deadline and your tolerance for risk, and it isn’t something to decide on the rate alone. With a live ECB decision on 11 June, intraday moves of 1–2% are possible in either direction. If you have a fixed deadline — a property completion or a supplier payment — a forward contract lets you fix today’s rate and remove that uncertainty. If you have time and flexibility, a rate alert lets you target a better level without watching the screen. A specialist can talk you through which fits your situation.
How Cambridge Currencies can help
Getting a good or bad euro rate makes a real financial difference, especially on a property purchase or a large business payment, yet for most people foreign exchange isn’t something they handle often. We work differently from the apps and online-only platforms: every transfer is handled by phone with a dedicated specialist — a dealer, not an app — who watches the market on your behalf and flags favourable moves, including around scheduled ECB and BoE decisions.
We support property completions across Spain, France, Italy, Portugal and Greece, and UK businesses paying euro suppliers or repatriating euro income, often at rates more competitive than a high-street bank on large or recurring payments. We work with FCA-authorised payment partners (Currencycloud, FRN 900199, and ScioPay, FRN 927951), with client funds held in safeguarded accounts. You can follow every ECB and BoE meeting in our weekly currency forecast, or see the wider picture in our currency forecasts hub. None of the above is financial advice — it’s guidance to help you make your own informed decision.
