Pound-to-Euro "Trapped" following Upbeat German Release

July 15, 2025 - Written by David Woodsmith

STORY LINK Pound-to-Euro "Trapped" following Upbeat German Release

Looking ahead to Wednesday’s European session, the Pound Euro (GBP/EUR) exchange rate will likely be influenced by the UK’s latest inflation figures.

June’s consumer price index is expected to show no change from the previous month, with headline inflation forecast to hold at 3.4% and core inflation steady at 3.5%.

If the data confirms that inflation remains well above the Bank of England’s 2% target, it may reduce the likelihood of an imminent rate cut and lend the Pound some modest support.

As for the Euro, the key release on Wednesday will be the Eurozone’s latest balance of trade figures.

Economists expect the region’s trade surplus to widen to €12 billion, up from €9.9 billion. If confirmed, this could offer the Euro some mid-week strength.

DAILY RECAP:

The Pound Euro (GBP/EUR) exchange rate was trapped in a narrow range on Tuesday despite the release of some forecast-beating data from Germany.


At the time of writing, the GBP/EUR was trading at around €1.1507, virtually unchanged from Tuesday’s opening levels.

The Euro (EUR) held firm against most major currencies on Tuesday, shrugging off the day’s risk-on mood thanks to the release of some stronger-than-expected economic data.

Germany’s latest ZEW economic sentiment index provided a modest boost to the single currency, as July’s reading jumped to 52.7, well above the forecast of 50.3 and up from 47.5 in June.

This marked the highest level of optimism in over three years, suggesting improving confidence despite lingering concerns over global trade tensions.

While the broader market tone favoured riskier assets, the upbeat ZEW report helped underpin the Euro, allowing it to hold its ground in a relatively optimistic trading environment.

The Pound (GBP) lacked clear direction on Tuesday, drifting against its peers as traders adopted a cautious stance ahead of Wednesday’s UK inflation report.

With June’s consumer price index (CPI) figures on the horizon, investors were reluctant to make decisive moves on Sterling ahead of the release.


An unexpected drop in inflation could amplify expectations for an August interest rate cut from the Bank of England (BoE), potentially triggering turbulence for GBP exchange rates.

In the meantime, the Pound edged lower against risk-driven currencies amid Tuesday’s upbeat market sentiment but managed to hold its ground against traditional safe-haven assets.

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TAGS: Pound Euro Forecasts