Pound-to-Euro Rate Steady as UK-EU Agree Post-Brexit Reset

May 19, 2025 - Written by David Woodsmith

STORY LINK Pound-to-Euro Rate Steady as UK-EU Agree Post-Brexit Reset

The Pound Euro (GBP/EUR) exchange rate traded in a narrow range on Monday ahead of the UK-EU summit.

At the time of writing, the GBP/EUR was trading at around €1.1881, virtually unchanged from Monday’s opening levels.

The Pound (GBP) started the week strongly and gained ground against most major currencies as markets focused on the upcoming UK–EU summit.

Investor optimism grew around the potential for a trade agreement that could renew economic cooperation after Brexit.

The deal aims to remove non-tariff barriers across agricultural industries, benefiting key UK sectors such as agriculture and defence, as well as energy.

This positive sentiment helped boost Sterling despite a data-light economic calendar, as hopes increased for closer ties between the UK and EU.

The Euro (EUR) began the week on a firm footing, buoyed by growing optimism over improved UK–EU trade relations ahead of the much-anticipated summit.


Adding to the Euro’s momentum was pressure on the US Dollar (USD), which weakened after Moody’s downgraded the United States’ AAA credit rating.

The move reflected concerns over the country’s ballooning deficit and escalating interest costs, pushing the ‘Greenback’ lower and offering support to the Euro due to their inverse relationship.

The Euro then found further support from the Eurozone’s finalised inflation figures.

April’s consumer price index showed core inflation ticking up to 2.7%, while headline inflation held steady at 2.2%, both in line with forecasts.

The Pound Euro (GBP/EUR) exchange rate could experience volatility on Tuesday as investors keep a close eye on developments from the ongoing UK–EU summit.

While expectation of stronger post-Brexit trade ties may help underpin Sterling, any signs of disagreement or lack of progress in key areas could weigh on the pairs performance.

Meanwhile, attention will also turn to Germany’s latest producer price index (PPI). April’s figures are expected to show a sharper decline, falling from -0.2% to -0.6%.


If confirmed, this would mark a further slowdown in producer inflation across the Eurozone’s largest economy and may place pressure on the Euro as we move into Tuesday’s European session.

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TAGS: Pound Euro Forecasts