GBP/EUR Forecast: Pound Sterling Wavers vs Euro as Both Currencies Attract Support

June 26, 2025 - Written by David Woodsmith

STORY LINK GBP/EUR Forecast: Pound Sterling Wavers vs Euro as Both Currencies Attract Support

The Pound Euro (GBP/EUR) exchange rate was rangebound on Thursday, with both currencies finding support.

The Euro (EUR) gained ground on Thursday, capitalising on a weaker US Dollar (USD) even as European data disappointed.

Fresh data showed that German consumer confidence unexpectedly dipped ahead of July, with households unnerved by global political tensions, particularly the growing uncertainty around US trade policy.

Despite this, the single currency advanced, largely due to its inverse relationship with the US Dollar. USD came under significant selling pressure following reports that President Donald Trump may move to nominate a new Federal Reserve Chair sooner than expected.

Markets interpreted the news as a signal that Trump could seek a more dovish replacement for current Chair Jerome Powell, who has so far resisted calls to cut interest rates. The prospect of a politically motivated change at the helm of the Fed rattled confidence in the central bank’s independence and fuelled expectations of looser US monetary policy.

As a result, USD softened, giving the Euro room to climb in Thursday’s session.

Meanwhile, the increasingly risk-sensitive Pound (GBP) found moderate support on Thursday, buoyed by an improving market mood. However, it struggled to keep pace with the strengthening Euro.


With geopolitical tensions easing in the Middle East thanks to a ceasefire agreement between Israel and Iran, markets tilted towards riskier assets. Sterling therefore gained some momentum against traditional safe-haven currencies.

Still, the rally had its limits. While GBP made headway against several counterparts, the Euro’s USD-driven strength kept Sterling unable to rise against the common currency.

Looking ahead, attention turns to fresh data from the Eurozone that could shape the trajectory of EUR heading into the weekend.

Economists are anticipating a slight pickup in economic sentiment for June. Should the figures beat forecasts, the Euro may find fresh upside momentum. On the other hand, a disappointing print could weigh on confidence and drag the single currency lower.

Traders will also be watching consumer inflation expectations across the Eurozone. A small dip could soften EUR demand, particularly if it feeds into dovish monetary policy speculation.

As for the Pound, the UK calendar is relatively quiet, leaving Sterling at the mercy of broader market forces. If risk appetite continues to recover in the wake of the Israel-Iran ceasefire, the Pound’s sensitivity to market mood could help it retain a competitive edge, particularly against traditionally safer currencies like the Euro.

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TAGS: Pound Euro Forecasts