ExchangeRates.org.uk – The Pound to Euro (GBP/EUR) exchange rate traded in a narrow range on Monday, following the publication of the European Commission’s latest growth forecasts.Latest — Exchange Rates:
Pound to Euro (GBP/EUR): 1.13478 (+0.16%)
Pound to Dollar (): 1.31569 (-0.02%)
Euro to Dollar (): 1.15942 (-0.18%)
DAILY RECAP:
The Euro (EUR) struggled to attract any meaningful support on Monday as EUR was both supported and undermined in equal measure.On the positive side, the European Commission revised up its growth forecast for the Eurozone economy, with the EC now forecasting a GDP expansion of about 1.3% in 2025, up from a previous estimate of around 0.9%.
The EC attributed the upgrade to a surge of exports at the start of the year as companies sought to boost inventories before US President Donald Trump’s tariffs came into effect.
However, the upside potential of the Euro remained limited by the single currency’s strong inverse correlation with the US Dollar (USD) as the latter got off to a strong start this week amid a further trimming of Federal Reserve interest rate cut bets.
The Pound (GBP) traded sideways on Monday as investors remained cautious in the face of persistent uncertainty surrounding the UK’s upcoming autumn budget.
Sterling’s recent performance has been increasingly volatile, with markets struggling to gauge the true extent of the UK’s fiscal shortfall and which policy choices Chancellor Rachel Reeves might ultimately pursue to close the gap.
Reeves had earlier hinted at an income tax increase, but reports of a sudden reversal late last week triggered a sizable slump in Sterling on Friday as UK borrowing costs spiralled.
Adding to the currency’s subdued tone are mounting expectations that the Bank of England (BoE) will opt for an interest rate cut when it convenes next month.
Near-Term GBP/EUR Forecast: Sterling to Tread Water Ahead of UK Inflation Data
Looking ahead, movement in the Pound Euro exchange rate may remain limited on Tuesday, as markets brace for high-impact economic releases later in the week.
The focus for GBP investors will undoubtedly be on Wednesday’s consumer price index.
October’s CPI figures are forecast to report UK inflation cooled for the first time since May, likely cementing bets the BoE will resume its cutting cycle in December and placing pressure on the Pound.
Meanwhile, with notable Eurozone data in short supply until the end of the week, movement in the Euro may be linked to wider market trends.
This content was originally published on ExchangeRates.org.uk
