Pound to Euro Forecast: GBP Subdued Despite Forecast-Beating PMIs

June 2, 2025 - Written by Frank Davies

STORY LINK Pound to Euro Forecast: GBP Subdued Despite Forecast-Beating PMIs

The Pound Euro (GBP/EUR) exchange rate traded in a narrow range on Monday despite the release of the UK’s and the Eurozone’s latest manufacturing PMIs.

At the time of writing, the GBP/EUR was trading at around €1.1858, virtually unchanged from Monday’s opening levels.

Sterling (GBP) found some modest support at the start of the week following the release of the UK’s finalised manufacturing PMI for May.

The index surprised to the upside, rising to 46.4 compared to initial estimates of 45.1, and up from 45.4 the previous month.

Despite remaining below the 50 threshold that separates growth from contraction, the upward revision helped soothe concerns over the health of the UK’s manufacturing sector, allowing the Pound to edge higher against several major counterparts.

The Euro (EUR) held its ground at the start of the week, drawing modest support from a slightly improved Eurozone manufacturing PMI and broader market dynamics.

May’s finalised PMI rose from 49 to 49.4, matching expectations and marking a small improvement, though the index also remained in contraction territory.


The common currency also benefited from a softer US Dollar (USD), as renewed trade tensions between the US and China dented demand for the ‘Greenback’.

Given the Euro and Dollar often move inversely, the dip in USD lent the single currency some additional support during Monday’s European session.

The Pound Euro (GBP/EUR) exchange rate could face some volatility on Tuesday as investors react to a number of key Eurozone data releases.

Attention will centre on the bloc’s latest inflation figures, with both core and headline CPI for May expected to ease.

A softer reading may weigh on the Euro, reinforcing expectations of further European Central Bank (ECB) policy loosening.

Also in focus will be the Eurozone’s latest unemployment rate, which is forecast to hold steady at 6.2%, which could offer the common currency some resilience.

In contrast, a lack of UK economic data means the Pound may be left drifting, potentially leaving GBP/EUR at the mercy of Euro-driven data and broader risk trends.

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TAGS: Pound Euro Forecasts