Pound-to-Euro Neutral as Soft Eurozone Data Tempers Appetite

July 7, 2025 - Written by Frank Davies

STORY LINK Pound-to-Euro Neutral as Soft Eurozone Data Tempers Appetite

The Pound to Euro exchange rate (GBP/EUR) traded mostly flat on Monday as the Eurozone published its latest retail sales reading for May.

At the time of writing, the GBP/EUR was trading at around €1.1887, virtually unchanged from Monday’s opening levels.

The Euro (EUR) advanced on Monday, shrugging off underwhelming economic data as broader market caution lifted demand for safer assets.

The Eurozone’s latest retail sales figures showed a 0.7% drop in May, the sharpest decline in nearly two years, and highlighted persistent weakness in consumer demand across the bloc.

The fall, which matched market forecasts, followed a modest 0.3% rise in April and added to concerns about the fragility of the Eurozone’s economic recovery.

Ordinarily, such a downbeat print may have pressured the Euro. However, with global markets turning risk-averse, the single currency gained support.

As a result, EUR exchange rates remained broadly supported throughout Monday’s session, despite the disappointing data release.


The Pound (GBP) saw mixed movement on Monday, despite a quiet UK data calendar.

In the absence of fresh economic releases, Sterling’s performance was largely shaped by broader market sentiment.

A cautious mood among investors helped lift the Pound against riskier currencies. However, its growing correlation with risk appetite meant GBP also lost ground against traditional safe-haven assets as risk-off flows took hold.

Looking ahead to Tuesday’s European session, the Pound Euro (GBP/EUR) exchange rate will likely be influenced by the release of Germany’s latest trade figures.

Europe’s largest economy is forecast to post a widened trade surplus for May, with expectations pointing to a rise from €14.6 billion to €18.1 billion.

A stronger-than-expected surplus would suggest an improvement in Germany’s export performance, potentially signalling stabilisation in the broader Eurozone economy, and could lend the Euro fresh support.

In contrast, the UK economic calendar remains bare, leaving the Pound without a clear domestic catalyst.


As such, GBP movement is likely to remain driven by shifts in broader market sentiment, particularly risk appetite.

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TAGS: Pound Euro Forecasts