Pound-to-Euro Rate Steady at 1.176 as EUR/USD Bounces of Lows

May 2, 2025 - Written by Frank Davies

STORY LINK Pound-to-Euro Rate Steady at 1.176 as EUR/USD Bounces of Lows

As EUR/USD bounces of multi-week lows, the Pound Euro exchange rate (GBP/EUR) drifted sideways on Thursday, with both currencies lacking clear direction as traders looked ahead to Friday’s pivotal Eurozone inflation figures.

At the time of writing, GBP/EUR traded at €1.1766, having wavered in a narrow range.

The Euro (EUR) saw limited movement on Thursday, with traders treading carefully ahead of a crucial inflation report due on Friday.

Rather than building on Wednesday’s stronger-than-expected GDP results, the single currency remained rangebound as attention turned to the upcoming consumer price index. With inflation data likely to influence expectations around future interest rate decisions from the European Central Bank (ECB), investors were reluctant to make bold moves.

The cautious mood was reinforced by a mixed market backdrop and a resurgent US Dollar (USD), with which the Euro shares a negative correlation. Nonetheless, the Euro held its ground, supported in part by lingering optimism around the Eurozone’s growth performance earlier in the week.

Meanwhile, the Pound (GBP) traded sideways on Thursday, with the start of local elections in England drawing market attention and contributing to a cautious tone around the Pound.

While these elections won’t directly influence national policy, they mark the first major test of public opinion since Labour’s sweeping general election win. A weak performance could prompt doubts about the party’s longer-term stability – a prospect that may unsettle markets still wary after years of political turbulence in the UK.


Beyond the political backdrop, a quiet UK economic calendar offered little to drive momentum, while the broader market mood remained tepid, further limiting any major moves in the increasingly risk-sensitive UK currency.

Looking ahead, Friday’s Eurozone inflation data is set to be the main event, with markets watching closely for clues about the European Central Bank’s next move.

Headline inflation is expected to have ticked down slightly in April, easing from 2.2% to 2.1%, while core inflation – which strips out volatile items – is forecast to edge higher from 2.4% to 2.5%.

On balance, such mixed results might do little to shift the Euro. However, any deviation from forecasts could move the Euro. A stronger-than-expected inflation reading is likely to lift the currency, particularly when combined with Wednesday’s upbeat GDP figures. Conversely, a weaker CPI print could add pressure, reinforcing expectations of ECB rate cuts.

As for the Pound, in the absence of any major UK data, it may continue to take its cues from wider market sentiment.

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TAGS: Pound Euro Forecasts