Introduction to the Pound Euro Exchange Rate
The Pound Euro (GBP/EUR) exchange rate has been seeing some fluctuations lately, and investors are waiting with bated breath to see what will happen next. One of the key factors that will influence the exchange rate is the UK’s latest GDP figures.
What to Expect from the UK’s GDP Figures
Analysts are expecting to see a modest rebound in British GDP in May, with the economy forecast to have grown 0.1% after April’s 0.3% contraction. If the data prints as expected, Sterling could enjoy modest support. However, any surprise results are likely to have a bigger impact on GBP exchange rates. A stronger reading could see Sterling accelerate, while a shock contraction would likely weigh heavily on the Pound.
How the Euro Will Be Affected
As for the Euro, German wholesale prices may impact the common currency. Signs of easing price pressures in the Eurozone’s largest economy could boost European Central Bank (ECB) interest rate cut bets and thereby weigh on EUR exchange rates. This could potentially affect the Pound Euro exchange rate, making it essential for investors to keep an eye on these developments.
Daily Recap of the Pound Euro Exchange Rate
The Pound Euro (GBP/EUR) exchange rate wavered on Thursday amid speculation around US tariffs and trade deals. At the time of writing, GBP/EUR was trading at €1.1593, roughly the same as its opening level. The Pound (GBP) was subdued on Monday, with GBP slipping against stronger rivals and trading sideways elsewhere, as a cheery market mood failed to lift the increasingly risk-sensitive UK currency.
Concerns About the UK Economy
Despite a generally upbeat tone in markets, due to trade deal hopes, GBP investors were less cheerful amid concerns about the UK economy. A new survey from professional services firm Alvarez & Marsal revealed that UK companies are among the most distressed in Europe. At the same time, the Office for National Statistics (ONS) published new data showing that in June, 26% of adults in the UK said they would be unable to afford an unexpected but essential expense of £850 – the highest reported proportion since September 2024 – indicating that the country’s cost-of-living squeeze is still constricting households.
The Euro’s Performance
Meanwhile, the Euro (EUR) was also relatively muted on Thursday as the safe-haven currency became less attractive due to the risk-on market mood. EUR was spared losses thanks to hopes that the US and the EU are close to securing a trade agreement. Recent comments from US President Donald Trump and communication between Brussels and Washington have led to speculation that an agreement in principle could be announced as early as this week. This helped offset a lack of safe-haven flows for the Euro, keeping GBP/EUR flat.
Conclusion
In conclusion, the Pound Euro exchange rate is currently seeing some fluctuations, and investors are waiting to see what will happen next. The UK’s GDP figures and German wholesale prices will be key factors in influencing the exchange rate. While concerns about the UK economy are still present, hopes of a trade agreement between the US and the EU are helping to keep the Euro afloat. As the situation continues to develop, investors will be keeping a close eye on these developments to see how they will affect the Pound Euro exchange rate.
