Pound Sterling Dented vs Euro as Single Currency Advances on Dollar Weakness

Modified: Monday, 16 June 2025 22:30 BST - Written by Frank Davies

STORY LINK Pound Sterling Dented vs Euro as Single Currency Advances on Dollar Weakness

The Pound to Euro exchange rate (GBP/EUR) dipped on Monday despite the day’s upbeat market sentiment.

At the time of writing, the GBP/EUR was trading at around €1.1725, down roughly 0.2% from Monday’s opening levels.

The Euro (EUR) advanced against most of its major peers on Monday, defying expectations amid a broadly upbeat market mood.

Typically, the single currency struggles during risk-on sessions, as investors favour riskier assets over safer ones like the Euro.

However, the Euro’s trading dynamics were shaped by notable weakness in the US Dollar (USD) on Monday.

Given the negative correlation between EUR and USD, the ‘Greenback’s’ decline indirectly supported the Euro.

As a result, EUR exchange rates were able to push higher, despite the absence of any major Eurozone economic releases or safe-haven demand.

The Pound (GBP) faced selling pressure early in the week, slipping against most of its major counterparts as investor sentiment leaned towards riskier assets.

Despite being viewed as a more risk-sensitive currency, Sterling found it difficult to rally against traditional safe-haven currencies, weighed down by ongoing doubts about the UK’s economic prospects.

Recent economic reports highlighting a deteriorating labour market and a significant drop in GDP intensified market speculation that the Bank of England (BoE) may soon consider cutting interest rates, dampening demand for the Pound.

Looking ahead for the Pound Euro (GBP/EUR) exchange rate on Tuesday, investor attention will likely turn to key Eurozone data.

Germany is set to release its latest ZEW economic sentiment index for June, with expectations for a sharp rise from 25.2 to 35.

If the index meets forecasts, it could provide further support for the Euro, potentially driving EUR gains throughout the week.

Meanwhile, the UK has no scheduled economic releases, meaning the Pound may lack a clear driver as Tuesday’s European session gets underway.

With limited domestic data to guide Sterling, GBP is likely to remain sensitive to broader shifts in global risk sentiment.

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TAGS: Pound Euro Forecasts