The Pound to Euro (GBP/EUR) exchange rate traded in a volatile range last week as geopolitical developments, economic data and UK political uncertainty drove movement in the pairing.
At the time of writing, GBP/EUR was trading near €1.1564, marginally lower on the week after rebounding from a one-week low struck on Thursday.
Pound to Euro (GBP/EUR): 1.15671
Pound to Dollar (GBP/USD): 1.36335
Euro to Dollar (EUR/USD): 1.17864
WEEKLY RECAP:
The Pound (GBP) struggled at the start of last week amid subdued trading conditions following the UK Bank Holiday.
Sterling later found support as improving hopes for a diplomatic breakthrough in the Middle East boosted global market sentiment and lifted risk-sensitive currencies.
However, the Pound came under renewed pressure midweek as political uncertainty surrounding the UK local elections unsettled investors.
Although the UK’s final services PMI for April was revised higher, concerns over the elections and speculation surrounding Prime Minister Keir Starmer’s leadership weighed on Sterling sentiment.
Early election results showed Labour suffering substantial losses, while Reform UK made major gains across England.
Current councillor changes show Labour down 202 seats, the Conservatives down 61, while Reform UK added 270 councillors. The Liberal Democrats gained 29 seats and the Greens added 23.
Sterling later stabilised after markets judged the outcome to be less damaging than initially feared, while Starmer reaffirmed his intention to remain Prime Minister.
Meanwhile, the Euro (EUR) lacked clear direction at the start of the week amid a limited Eurozone data calendar and shifting market sentiment.
The single currency strengthened midweek thanks to broad US Dollar weakness, allowing EUR to shrug off disappointing PMI data that confirmed a contraction in Eurozone private sector activity.
Stronger German factory orders later in the week also provided some support for the Euro before gains faded into Friday’s trade.
GBP/EUR Forecast: UK GDP and German Sentiment Data in Focus
Looking ahead, the UK’s preliminary first-quarter GDP figures are likely to be the key domestic release for Sterling.
If growth is shown to have improved at the start of 2026, the Pound could strengthen. However, weaker-than-expected data may place renewed pressure on Sterling.
For the Euro, Germany’s latest ZEW economic sentiment survey will be closely watched.
Further deterioration in confidence across the Eurozone’s largest economy could weigh on the single currency if investors grow more concerned about the region’s economic outlook.
