Pound to Euro Forecast: GBP/EUR Rebounds from 1.15 Support

July 24, 2025 - Written by Ben Hughes

STORY LINK Pound to Euro Forecast: GBP/EUR Rebounds from 1.15 Support

The Pound to Euro exchange rate (GBP/EUR) found support close to 1.1500 on Tuesday and has rebounded to around 1.1550 on Wednesday.

The framework US-Japan trade deal has boosted global risk appetite.

The FTSE 100 index posted a fresh record high amid gains for industrial commodities which has underpinned the Pound in global markets.

Traders were also focusing on the fact that the EU have not yet secured a trade deal with the US.

Scotiabank commented; “Sentiment appears to be dominating, with a focus on trade as markets react to news of a US/Japan trade deal and consider the lack of progress on an agreement between the US and EU.”

The Euro could get a boost if negotiators manage to secure a deal before the August 1st deadline

The latest business confidence data from the UK and Euro-Zone will also be watched closely to assess underlying growth trends.


Scotiabank commented; “Domestic releases have been limited, and all eyes are on Thursday’s preliminary PMI’s where manufacturing is expected to remain in contraction (sub-50) and services are expected to show a modest expansion (above 50).”

Firm data would be significant in easing market fears over the UK fiscal outlook.

Bank of America sees scope for some limited reassessment of the UK fundamentals outlook.

According to the bank; "We do not understate the fragile state of UK public finances but continue to be struck by how markets are willing to find the UK guilty of fiscal breaches before being (given) the opportunity of proving innocence."

The ECB policy decision on Thursday will also be a key element with markets remaining confident that the central bank will hold rates at 2.00% at this meeting.

Comments from bank President Lagarde will be scrutinised very closely.

JP Morgan commented; “On guidance, we suspect the ECB will revert back to the data-dependent and meeting-by-meeting approach. That was present in June as well, at least in the policy statement, but was superseded by a surprisingly explicit signal from Lagarde that a pause is likely in July.”


The bank added; “The risk of a further strengthening of the currency may also play on the minds of some Governing Council members and make them reluctant to unnecessarily reduce the optionality for September.”

Unicredit notes that the US-EU trade negotiations have not been concluded with the underlying uncertainty encouraging no change from the bank.

It added; “we do not expect any directional message by Ms. Lagarde, although the door will remain open for further action. We confirm our expectation for a final 25bp rate cut in September as downside risks to activity continue to prevail over upside risks to inflation.”

There is still evidence of solid underlying Euro demand in global markets.

ING commented; “news from the credit space is that global investors are showing a keener interest in euro-denominated products, and issuers are obliging. This is bound to be a story we'll be tracking closely.”

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TAGS: Pound Euro Forecasts