Pound-to-Euro Retakes 1.16 Amid Tariff Jitters

July 9, 2025 - Written by Tim Boyer

STORY LINK Pound-to-Euro Retakes 1.16 Amid Tariff Jitters

The Pound Euro (GBP/EUR) exchange rate firmed on Wednesday following the announcement of new US tariffs from US President Donald Trump.

At the time of writing, the GBP/EUR was trading at around €1.1608, up roughly 0.2% from Wednesday’s opening levels.

The Euro (EUR) weakened on Wednesday as escalating trade tensions between the US and its international partners rattled market confidence.

US President Donald Trump unveiled a fresh wave of tariffs, including a 50% duty on copper imports, and issued a warning that pharmaceuticals could face a 200% levy.

These aggressive moves added strain to already fragile trade discussions between the EU and the US.

While European officials are still aiming to secure a deal that would prevent a default 10% tariff, Trump’s confirmation that a formal tariff notice will be issued later this week weighed on investor sentiment.

Amid the heightened uncertainty, the Euro lost ground as traders moved away from the single currency during the European session.


The Pound (GBP) traded with relative stability on Wednesday, recovering from earlier losses despite a continued lack of UK economic data.

Sterling found some relief after Tuesday’s selloff, which was triggered by renewed concerns over the UK’s fiscal health.

The Office for Budget Responsibility (OBR) issued a stark warning, projecting that government debt could soar to 270% of GDP by the 2070s.

The report also highlighted that the UK faces the third-highest borrowing costs among developed economies.

While the fiscal outlook remains a point of concern, the Pound managed to regain some ground during mid-week trade.

Looking ahead to Thursday’s European session, the Pound Euro (GBP/EUR) exchange rate may be influenced by Germany’s latest consumer price index (CPI) figures.

The finalised data for June is expected to show a slight easing in both the standard and harmonised inflation measures, with forecasts pointing to a dip from 2.1% to 2%.


If confirmed, this would place German inflation back in line with the European Central Bank’s (ECB) target, potentially fuelling speculation about further interest rate cuts and weighing on the Euro.

Meanwhile, the UK economic calendar remains empty, offering little in the way of direction for the Pound.

As a result, GBP movement is likely to be guided by broader market sentiment throughout Thursday’s trading session.

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TAGS: Pound Euro Forecasts