Pound-to-Euro Rate Stabilises after Jumping Overnight

May 30, 2025 - Written by Frank Davies

STORY LINK Pound-to-Euro Rate Stabilises after Jumping Overnight

The Pound to Euro exchange rate (GBP/EUR) spiked overnight on Wednesday following US trade news, although the pairing stabilised as movement subsided during European trade.

At the time of writing, GBP/EUR traded at €1.1941, little changed from the start of the European session but up from €1.1920 overnight.

The Euro (EUR) slipped during overnight trade on Wednesday night, knocked lower by renewed strength in the US Dollar (USD) due to EUR’s negative correlation with USD. However, the common currency managed to regain its balance once European markets opened on Thursday.

The earlier drop in EUR came as the US Dollar rallied on the back of a legal setback for President Donald Trump’s tariff measures. A federal court in New York ruled that Trump exceeded his authority by invoking emergency powers to impose retaliatory tariffs without congressional approval.

USD investors cheered the ruling, hoping that it lessens the likelihood of a US recession or stagflation. This bolstered the ‘Greenback’, which in turn pressured the Euro.

Still, some commentators suggested that the White House will look for alternative routes to enforce its trade agenda, keeping a degree of uncertainty in play. This helped the Euro stabilise as European trade began.

Further movement in the common currency was muted as the Eurozone’s economic calendar thinned out, with EUR investors looking ahead to Friday for the next notable data releases.


The Pound (GBP) was little changed on Thursday, drifting in a narrow range as a lack of UK economic data kept trading subdued.

Sterling saw a small lift overnight, picking up on the back of a broader positive market reaction to the US tariff ruling thanks to the currency’s increasingly risk-sensitive status. But with no domestic data or major UK news to follow it up, there wasn’t much to drive the Pound in either direction during the European session.

Looking ahead to Friday, all eyes will be on Germany’s latest inflation data. The preliminary figures for May are expected to show a slight easing in price pressures in the Eurozone’s largest economy, with annual inflation forecast to dip from 2.1% to 2%. If confirmed, it could strengthen expectations for an interest rate cut from the European Central Bank (ECB), putting fresh pressure on the Euro.

Before that, retail sales data from Germany could also influence EUR exchange rates. Economists are expecting a rebound in consumer spending, which might give the single currency an early lift. However, any gains could be limited as markets hold out for the inflation figures.

The Euro could also react to broader market trends, particularly any shifts in the US Dollar. If the recent USD rally loses steam, EUR might find some support as the Dollar pulls back.

As for the Pound, the UK economic calendar remains empty on Friday, leaving GBP to move in line with global risk appetite. If renewed concerns about trade tensions start to drag on sentiment, Sterling could come under pressure.

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TAGS: Pound Euro Forecasts