Pound to Euro Soft into BoE

Modified: Monday, 3 November 2025 22:30 BST - Written by David Woodsmith

STORY LINK Pound to Euro Soft into BoE

The Pound Euro (GBP/EUR) exchange rate was little changed on Monday as traders weighed mounting Bank of England (BoE) rate cut speculation against a broadly upbeat global risk backdrop.

At the time of writing, GBP/EUR was trading around €1.1396, flat on the day after fluctuating within a narrow range during the European session.

The Pound (GBP) struggled to gain traction on Monday as investors digested growing expectations that the Bank of England could cut interest rates at this week’s policy meeting.

Analysts at both Barclays and Goldman Sachs suggested on Friday that the odds of a November rate cut had risen substantially, prompting traders to reduce their exposure to Sterling ahead of Thursday’s announcement.

This shift in sentiment weighed on the Pound, which failed to capitalise on the day’s risk-on tone, with markets instead positioning cautiously in anticipation of a dovish turn from the BoE.

As one trader noted, the market “has started to price in not just a rate cut this week, but the beginning of a more sustained easing cycle,” leaving GBP under steady pressure.

The Euro (EUR) traded without clear direction at the start of the week, struggling to attract demand as risk appetite improved across global markets.

Typically viewed as a lower-yielding safe haven, the single currency came under mild pressure as investors favoured risk-sensitive assets such as the Australian and New Zealand Dollars.

With no significant Eurozone data released on Monday to provide direction, the Euro’s movements were largely driven by broader sentiment and cross-currency flows, keeping EUR exchange rates rangebound through the session.

GBP/EUR Forecast: Lagarde Speech in Focus

Looking ahead to Tuesday, the Pound Euro (GBP/EUR) exchange rate will likely be guided by comments from European Central Bank (ECB) President Christine Lagarde.

If Lagarde signals greater caution over the Eurozone’s economic outlook or reaffirms expectations for a prolonged pause in rate hikes, the Euro could extend its recent softness.

Meanwhile, with no major UK releases scheduled before Thursday’s BoE policy decision, the Pound is expected to remain on the defensive, particularly if investors continue to ramp up bets on near-term rate cuts.

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TAGS: Pound Euro Forecasts