Euro to Pound Sterling Forecast: EUR Firm Despite Downbeat Market Mood

July 22, 2025 - Written by Frank Davies

STORY LINK Euro to Pound Sterling Forecast: EUR Firm Despite Downbeat Market Mood

The Euro-to-Pound exchange rate (EUR/GBP) was trapped in a narrow range on Tuesday despite a souring market mood.

At the time of writing, the GBP/EUR was trading at around €1.1528, virtually unchanged from Tuesday’s opening levels.

The Euro (EUR) found modest support on Tuesday, strengthening against several of its peers despite the absence of any notable Eurozone data releases.

Although muted against the Pound (GBP), a broadly cautious market tone helped lift demand for the safe-haven common currency, allowing it to edge higher against its risk-sensitive rivals.

However, the Euro’s gains were limited, as persistent concerns over US–EU trade relations acted as a headwind, tempering investor enthusiasm and keeping EUR performance relatively contained.

The Pound saw uneven trading on Tuesday, with its performance driven mainly by shifting risk appetite amid a quiet UK economic calendar.

Sterling managed to edge higher against its risk-sensitive rivals despite its own growing correlation with risk appetite, as an anxious trading environment dented demand for those currencies.


However, the Pound struggled to build momentum elsewhere, holding steady against safe-haven currencies such as the Euro, as the prevailing risk-off sentiment kept GBP gains in check.

Looking ahead to Wednesday’s European session, the Pound Euro (GBP/EUR) exchange rate is likely to remain subdued, with both currencies lacking clear direction in the absence of any high-impact domestic data.

With no notable UK or Eurozone releases scheduled, investors are likely to look ahead to more influential events later in the week.

The primary focus will be Thursday’s European Central Bank (ECB) interest rate decision.

While the ECB is widely expected to hold interest rates steady at its July meeting, the tone of the accompanying statement and press conference will be crucial in determining the central banks next move.

Any hints that further rate cuts remain on the table, especially in light of lingering concerns about weak growth across the bloc, could weigh heavily on EUR exchange rates.

Equally, if policymakers strike a more hawkish tone or express confidence in the Eurozone’s economic outlook, the single currency could find renewed support and push higher in the latter half of the week.


At the same time, the Pound may find fresh impetus from the UK’s upcoming flash PMI figures, also set for release on Thursday.

Markets are expecting the UK’s services PMI reading, the dominant sector of the UK economy, to remain in expansion territory, which could underpin GBP exchange rates.

Until then, however, the GBP/EUR exchange rate is likely to remain rangebound, as traders await Thursday’s key events.

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TAGS: Euro Pound Forecasts