Pound Sterling Forecast: GBP/EUR Steady as German Confidence Hits April Low

Modified: Wednesday, 27 August 2025 21:45 BST - Written by David Woodsmith

STORY LINK Pound Sterling Forecast: GBP/EUR Steady as German Confidence Hits April Low

The Pound-to-Euro exchange rate (GBP/EUR) was trapped in a narrow range on Wednesday as the UK released its latest CBI distributive trades survey and Germany released its latest GfK consumer confidence data.

At the time of writing, the GBP/EUR was trading at around €1.1595, virtually unchanged from Wednesday’s opening levels.

The Euro (EUR) came under pressure on Wednesday, weakening against most major peers after Germany’s latest GfK consumer confidence index revealed a deeper slump than expected.

September’s reading fell from -21.7 to -23.6, missing forecasts of -22 and marking the lowest level since April 2025.

The downbeat figures reinforced concerns over fragile consumer sentiment in the Eurozone’s largest economy, dragging on demand for the single currency.

Adding to the Euro’s woes was a strong US Dollar (USD), with the currencies’ negative correlation amplifying EUR losses as the ‘Greenback’ gained ground through mid-week trade.

The Pound (GBP) moved within a broad range on Wednesday, showing gains against some peers while remaining subdued against others, following the release of the UK’s latest CBI distributive trades survey.

The report highlighted a continued contraction in retail activity, though the index came in slightly stronger than expected, rising from -34 to -32 compared to forecasts of -33.

The modestly better-than-expected reading provided some support for Sterling, helping the Pound maintain a steady footing against most major currencies during mid-week European trading.

GBP/EUR FORECAST

Looking ahead to Thursday’s European session, the Pound Euro (GBP/EUR) exchange rate is likely to take its cue from the Eurozone’s latest economic sentiment index.

August’s reading is expected to show a modest improvement, rising from 95.8 to 96.

If confirmed, the uptick would suggest confidence across the bloc is recovering, which may help the Euro gain some ground.

In contrast, the UK calendar will remain quiet, leaving Sterling without a clear domestic driver.

As a result, GBP is likely to fluctuate in line with overall market mood, potentially capping any significant movement against the single currency.

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TAGS: Pound Euro Forecasts