Pound to Euro Today: Will UK Retail Sales Knock Pound Sterling Off Balance?

Modified: Thursday, 4 September 2025 17:30 BST - Written by David Woodsmith

STORY LINK Pound to Euro Today: Will UK Retail Sales Knock Pound Sterling Off Balance?

The Pound to Euro (GBP/EUR) exchange rate was trapped in a narrow range on Thursday despite the release of weaker-than-expected data from the Eurozone.

At the time of writing, the GBP/EUR was trading at around €1.1542, virtually unchanged from Thursday’s opening levels.

The Euro (EUR) saw mixed movement on Thursday, benefiting from safe-haven demand but coming under pressure following disappointing data from the Eurozone.

The bloc’s latest retail sales figures revealed a sharp drop in July, with the index sliding from 0.6% to -0.5%, far worse than the -0.2% decline forecast.

The weak result heightened concerns over consumer activity across the region.

While the Euro managed to edge higher against risk-sensitive currencies amid the day’s cautious market mood, losses against other peers reflected the drag from the downbeat retail sales report.

The Pound (GBP) held firm through Thursday’s European session, advancing against several peers despite the cautious mood across markets.

Investor appetite shifted towards safe-haven assets, and while Sterling often behaves as a risk-sensitive currency, the downbeat sentiment allowed it to gain ground against more volatile counterparts such as the Australian Dollar (AUD) and New Zealand Dollar (NZD).

Lingering support also came from remarks made a day earlier by Bank of England (BoE) Governor Andrew Bailey.

His hawkish tone tempered expectations for imminent rate cuts, helping to underpin GBP demand during Thursday’s trade.

GBP/EUR Forecast: UK Retail Sales Data to Drive Movement

The focus in Friday’s European session will fall on the UK’s upcoming retail sales figures, which could set the tone for Pound to Euro (GBP/EUR) trade.

Economists are expecting a slowdown in spending during July, with the index projected to slip from 0.9% to 0.2%.

If confirmed, the weaker data may dampen confidence in Sterling and push the currency onto the back foot.

In contrast, the Eurozone’s calendar offers no major releases to close out the week.

With a lack of fresh catalysts on Friday, the single currency may struggle to establish a decisive trajectory, leaving EUR movement largely influenced by external drivers.

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TAGS: Pound Euro Forecasts