Pound To Euro End-April Forecast: GBP Push Towards 1.16 As ECB Outlook Weighs

The Pound to Euro (GBP/EUR) exchange rate closed the week near 1.1545 on Friday, holding close to recent highs as Sterling outperformed on firm UK data while Euro gains remained capped.

WEEKLY RECAP:

GBP/EUR moved gradually higher through the week, extending gains from the 1.1480 area to test resistance above 1.1550.

The move was not aggressive but showed steady upward pressure.

Sterling found support from stronger UK data and shifting rate expectations.

Recent surveys have pointed to rising cost pressures across UK firms, reinforcing expectations that the Bank of England may need to maintain a tighter stance for longer.

That helped underpin demand for the Pound.

At the same time, the Euro struggled to build momentum.

The single currency was weighed down by a more cautious policy outlook from the European Central Bank, with markets expecting rates to remain unchanged in the near term despite persistent inflation risks.

Energy remains the dominant theme.

Oil prices stayed elevated following disruption linked to the US–Iran conflict, keeping inflation risks in focus but also raising concerns about growth, particularly in the Eurozone.

In a recent client note, ING highlighted that relative rate expectations continue to favour the Euro longer term, but near-term moves are being driven by sentiment and positioning.

Scotiabank also noted that recent G10 FX moves reflect reduced conviction, with markets reacting more to shifts in energy prices and geopolitical headlines than domestic fundamentals.

With both currencies influenced by the same external drivers, gains in GBP/EUR have been measured rather than decisive.

Near-Term GBP/EUR Forecast: PMI Data and Central Bank Signals in Focus

For Pound Sterling, the focus in the week ahead will turn to UK labour market data (Tuesday) and Bank of England communication, with markets watching for any shift in rate expectations.

High-frequency indicators will also be monitored to assess whether rising energy costs are feeding into inflation and business activity.

Stronger data or hawkish signals could support Sterling.

For the Euro, attention will centre on Eurozone and German inflation data, alongside ECB communication ahead of the April policy meeting.

Markets will also closely watch flash PMI surveys, which are expected to provide an early indication of how rising energy costs are impacting growth across the bloc.

If Eurozone data softens while UK data remains firm, GBP/EUR could extend gains towards 1.1600.

However, stronger inflation signals or a rebound in Eurozone activity could support the Euro and 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 1.1450–1.1600 range.