Pound to Euro Firms amid UK Data Surprise

Modified: Monday, 27 October 2025 23:45 BST - Written by David Woodsmith

STORY LINK Pound to Euro Firms amid UK Data Surprise

The Pound-to-Euro exchange rate (GBP/EUR) edged higher on Monday as improving global risk sentiment and brighter UK business data offered the Pound Sterling modest support.

At the time of writing, GBP/EUR was trading around €1.1465, up approximately 0.2% from Monday’s opening levels.

The Pound (GBP) strengthened slightly during the European session as investors turned more optimistic amid signs of easing trade tensions between the US and China.

Reports that both sides had agreed on a preliminary framework for a new trade deal helped lift risk appetite, supporting risk-sensitive currencies such as Sterling.

The breakthrough comes ahead of a meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea, where the trade truce is expected to be extended beyond November.

Adding to Sterling’s momentum, the Confederation of British Industry’s (CBI) distributive trades index rose to a five-month high in October, suggesting a potential rebound in UK retail activity.

The Euro (EUR), meanwhile, struggled to find direction despite stronger-than-expected German IFO business sentiment data.

The index climbed from 87.7 to 88.4, surpassing forecasts for a smaller rise, though the current conditions sub-component weakened, tempering enthusiasm for the single currency.

Investors also appeared cautious ahead of key Eurozone events later in the week, including the European Central Bank’s (ECB) interest rate decision and the release of third-quarter GDP figures, both of which could shape sentiment towards the Euro.

GBP/EUR Forecast: German Confidence and ECB Decision in Focus

Looking ahead, attention will turn to Germany’s latest consumer sentiment survey on Tuesday, which may offer a modest lift for the Euro if household morale improves.

However, with no major UK data releases scheduled, Sterling’s near-term direction will likely continue to mirror shifts in broader market sentiment.

If risk appetite remains firm, the Pound could continue to recover modestly, potentially driving the GBP/EUR exchange rate closer to the €1.15 handle.

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TAGS: Pound Euro Forecasts