Pound-to-Euro Forecast: GBP Holds Near 1.15 As Momentum Fades

The Pound to Euro (GBP/EUR) exchange rate held near 1.1504 on Wednesday, with limited movement as both currencies tracked broader shifts in global sentiment.

DAILY RECAP:

GBP/EUR traded in a tight range during early Wednesday sessions, struggling to extend gains after pushing briefly above 1.1510 the previous day.

Recent upside has been gradual rather than aggressive.

The pair has edged higher this week, supported mainly by external factors rather than clear divergence between the Pound and Euro.

Earlier volatility tied to the US–Iran conflict drove swings in both currencies.

A surge in oil prices initially pressured the Euro, given the Eurozone’s exposure to energy imports, while the Pound also faced headwinds from global risk aversion.

That pressure has eased.

Oil prices have stabilised, and risk sentiment has improved, allowing both currencies to recover ground against the US Dollar.

With that external driver fading, GBP/EUR has settled into a narrower range.

In a brief to clients, Scotiabank recently noted that recent G10 moves have become more balanced, with less directional conviction as markets reassess geopolitical risks.

Pound Sterling has held relatively firm.

The Pound has been supported by steady demand for UK assets and a stabilisation in rate expectations, although there has been little fresh domestic impetus.

FXCM analysts flagged that UK yield support has helped limit downside in Sterling despite a lack of strong data surprises.

The Euro has also found support.

Rising Eurozone yields and lingering inflation concerns tied to energy markets have underpinned the single currency, even as growth risks remain in focus.

ING economists, in a recent note, highlighted that the Euro continues to attract demand on dips, particularly as energy market volatility begins to ease.

With both currencies moving in tandem, GBP/EUR direction has remained limited.

Near-Term GBP/EUR Forecast: Focus Turns to UK and Eurozone Data

For Pound Sterling, attention will turn to upcoming UK inflation data and any Bank of England commentary.

Markets will be watching closely for signals on whether price pressures remain persistent enough to influence policy expectations.

Stronger inflation or hawkish guidance could support the Pound.

For the Euro, focus shifts to Eurozone inflation releases and ECB communication over the coming days.

Energy prices remain a key variable, with any renewed increase likely to reinforce inflation concerns and support the Euro, while easing pressures could limit upside.

If UK data surprises to the upside while Eurozone data softens, GBP/EUR could move towards 1.1550.

However, stronger Eurozone inflation or a rebound in energy prices could pull the pair back towards 1.1450.

In the near-term, Exchange Rates UK Research forecast that the Pound to Euro exchange rate will trade within the 1.1450–1.1550 range.