Pound-to-Euro Rate Rangebound following GDP Figures

May 15, 2025 - Written by Ben Hughes

STORY LINK Pound-to-Euro Rate Rangebound following GDP Figures

The Pound Euro exchange rate (GBP/EUR) traded in a narrow range on Thursday as a risk-off mood offset downbeat Eurozone GDP and positive UK figures.

At the time of writing, GBP/EUR traded at €1.1863, virtually unchanged on the morning’s opening rate.

The Pound (GBP) found support on Thursday following the UK’s latest growth figures, which showed the economy expanding at its fastest pace in a year.

According to official data, GDP rose by 0.7% in the first quarter of 2025 – a notable jump from 0.1% in the previous quarter and slightly ahead of expectations.

This stronger-than-anticipated performance positions the UK as a potential frontrunner among G7 economies in early 2025, lifting the Pound against a number of major currencies. However, GBP/EUR remained relatively flat as the Euro (EUR) also attracted support.

Despite the impressive growth figures, worries about the economic outlook tempered Sterling’s gains. There are concerns that the growth in Q1 may not be sustainable. UK Chancellor Rachel Reeves acknowledged as much, warning of ‘economic headwinds’ that could weigh on future performance.

In addition, lingering global uncertainty saw investors favour safer assets, which further capped the increasingly risk-sensitive Pound’s upside.


The Euro showed resilience on Thursday, shrugging off a downward revision to the Eurozone’s first-quarter growth figures. Updated data revealed that GDP across the bloc rose just 0.3% at the start of the year, down from the initial estimate of 0.4%.

Despite the weaker print, the single currency managed to stay afloat. One key factor was the Euro’s inverse relationship with the US Dollar (USD), which continued to slip following Tuesday’s weak US inflation data. In addition, the downbeat market mood saw increased demand for safer currencies like the Euro.

Adding further support was a recalibration of expectations around European Central Bank (ECB) monetary policy. Investors reassessed the outlook for rate cuts, in part due to the recent US-China trade deal. With fewer low-cost Chinese exports likely to enter the EU, the agreement is seen as reducing deflationary pressures within the Eurozone. This, in turn, prompted markets to scale back ECB rate cut bets, helping to support the Euro in the face of disappointing growth figures.

Friday’s trading session may be relatively quiet on the data front, with only the Eurozone’s latest trade balance figures scheduled for release.

However, investors will be paying close attention to speeches from European Central Bank officials Piero Cipollone and Chief Economist Philip Lane. Any hints of a more dovish stance could weigh on the Euro, especially as markets remain sensitive to the evolving interest rate outlook.

Beyond the ECB commentary, broader market sentiment is likely to drive movement in the Pound to Euro exchange rate. A deterioration in risk appetite may favour the more stable Euro, while potentially putting pressure on the risk-sensitive Pound heading into the weekend.

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TAGS: Pound Euro Forecasts