Pound to Euro Rate "Muted" as EUR Unfazed by PPI Drop

May 6, 2025 - Written by Frank Davies

STORY LINK Pound to Euro Rate "Muted" as EUR Unfazed by PPI Drop

Looking ahead to Wednesday, the main factor influencing the Pound Euro exchange rate will likely be the release of the Eurozone’s latest retail sales index and Germany’s latest factory orders.

The Bloc’s latest retail sales reading is expected to dip while Germany’s latest factory orders is forecast to show a rise within the Eurozone’s largest economy.

Should the data print as expected, the mixed results could weigh on EUR exchange rates as we move into mid-week trade.

For the Pound, the UK’s data-calendar will be sparse during Wednesday’s European session.

This will likely see the Pound struggle to find a clear trajectory and trade in line with broader market sentiment.

DAILY RECAP:

The Pound Euro (GBP/EUR) exchange rate was largely muted on Tuesday despite the release of the Eurozone’s latest PPI reading and the UK’s latest services PMI.


At the time of writing, the GBP/EUR was trading at around €1.1757, virtually unchanged from Tuesday’s opening levels.

The Euro (EUR) held its ground against almost all of its counterparts on Tuesday, and even managed to rise, following the release of the Eurozone’s latest PPI (producer price inflation) data.

Although March’s reading printed in line with estimates, the data slumped from February’s 0.2% reading down to -1.6% and saw a rise in European Central Bank (ECB) interest rate cut bets.

However, despite the data marking the worst reading in almost two years, the common currency managed to hold strong against its peers regardless.

Just like the Euro, the Pound (GBP) also managed to maintain its position against most of its rivals, even rising against several of its peers, despite the release of some underwhelming domestic data.

The UK released its latest services PMI for April, which reported a fall from 52.5 to 49, only marginally ahead the expected 48.9 reading.

The index marked the first reading within the contraction zone (a reading below 50) since October 2023, driven primarily by global trade disruptions, however, Sterling also managed to hold its ground following the release.

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TAGS: Euro Forecasts Pound Sterling Forecasts