Pound-to-Euro Firms Following Final Services PMIs

Modified: Tuesday, 5 August 2025 14:30 BST - Written by David Woodsmith

STORY LINK Pound-to-Euro Firms Following Final Services PMIs

The Pound Euro (GBP/EUR) exchange rate rose on Tuesday as the latest services PMIs for the UK and the Eurozone were revised higher and lower, respectively.

At the time of writing, GBP/EUR traded around €1.1510, up almost 0.3% from the start of the session.

The Pound (GBP) ticked higher on Tuesday, buoyed by an upward revision to the UK’s final services PMI reading for July.

Initial estimates had pointed to a notable slowdown in the sector, with activity dropping from 52.8 to 51.2. However, the final reading was revised to 51.8 – still indicating a deceleration, but less severe than feared. It also marked the third straight month of expansion in the UK’s dominant services industry.

The Pound also benefited from a broadly upbeat market mood, as risk appetite improved across global markets, thereby benefiting the increasingly risk-sensitive currency.

The Euro (EUR) struggled on Tuesday following a downward revision to the Eurozone’s final services PMI, which came in at 51, slightly below the initial flash estimate of 51.2 and trailing the UK’s corresponding figure.

While the result marked an improvement on June’s near-flat 50.5 and the fastest pace of expansion since March, the underlying data raised concerns. Notably, new export business declined for the 26th consecutive month, highlighting ongoing weakness in external demand.


Adding to the pressure, the Euro faced headwinds from its strong inverse relationship with the US Dollar (USD), which regained ground and diverted investor interest away from the single currency.

Looking ahead, the Euro may find support during Wednesday’s session as fresh economic data from the Eurozone comes into play.

Germany’s factory orders are set to be the first key release, with forecasts pointing to a 1% rebound in June after a 1.4% contraction in May. Should Europe’s largest economy show signs of recovering momentum, the single currency could strengthen.

Later in the day, Eurozone retail sales are expected to show a modest recovery, with 0.4% growth projected following a 0.7% dip in May. If confirmed, this could further boost sentiment around the Euro.

The Pound, by contrast, may trade quietly in the absence of any major UK data. With investors turning their attention to Thursday’s Bank of England (BoE) interest rate decision, where a rate cut is widely anticipated, the Pound could remain muted in the interim.

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TAGS: Pound Euro Forecasts