Pound-to-Euro Rate Falls Despite Dovish ECB as EUR Bid Against Dollar

Modified: Friday, 6 June 2025 11:00 BST - Written by Ben Hughes

STORY LINK Pound-to-Euro Rate Falls Despite Dovish ECB as EUR Bid Against Dollar

The Pound to Euro exchange rate (GBP/EUR) dipped on Thursday following the European Central Bank’s latest interest rate meeting.

At the time of writing, the GBPEUR was trading at around €1.1842, down roughly 0.2% from Thursday’s opening levels.

The Euro (EUR) strengthened on Thursday, advancing against several major peers following the European Central Bank’s (ECB) latest policy announcement.

As expected, the ECB delivered a 25 basis-point interest rate cut, while also revising down its 2026 growth and 2025 inflation forecasts.

ECB President Christine Lagarde also voiced concerns over the potential impact of US tariffs on the Eurozone economy.

However, despite the dovish tone, the Euro manage to catch bids regardless, largely buoyed by a declining US Dollar (USD).

With EUR/USD typically moving inversely, the Greenback’s tumble helped lift the common currency during Thursday’s trading session.

The Pound (GBP) lacked momentum on Thursday and drifted without a clear direction amid a quiet UK economic calendar.

In the absence of domestic data, Sterling’s movements were largely dictated by broader market sentiment.

A mildly upbeat market mood provided some support for GBP against safe-haven currencies, but the same risk-on mood saw the Pound lose ground to more risk-sensitive counterparts.

Looking to the end of the week, the Pound Euro (GBP/EUR) exchange rate could face fresh pressure as the Eurozone gears up to release a trio of key economic reports on Friday.

April’s retail sales figures, alongside first-quarter employment change and GDP estimates, are all expected to show modest improvements.

If the data confirms an encouraging outlook for the bloc’s economy, the Euro may gain traction, potentially pushing the exchange rate higher as the week draws to a close.

Meanwhile, with no notable UK data on the calendar, the Pound may remain directionless, leaving it vulnerable to once again to market sentiment.

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TAGS: Pound Euro Forecasts