Pound to Euro Gains as EUR Pressured by Trade Dispute

Modified: Thursday, 20 November 2025 17:00 BST - Written by David Woodsmith

STORY LINK Pound to Euro Gains as EUR Pressured by Trade Dispute

The Pound to Euro exchange rate (GBP/EUR) edged higher on Thursday as tensions between the EU and China dampened appetite for the Euro.

At the time of writing, the GBP/EUR exchange rate was hovering near €1.1347, roughly 0.3% above the day’s opening level.

The Euro (EUR) came under pressure on Thursday as uncertainty persisted over the ongoing dispute between Brussels and Beijing surrounding semiconductor firm Nexperia.

The Dutch government seized control of the company earlier in the year amid concerns that its Chinese owners intended to shift key technology and assets out of Europe.

Although Dutch economy minister Vincent Karremans announced on Wednesday that the controls would be eased as a ‘gesture of goodwill’, Beijing’s Ministry of Commerce insisted that further action was required to ‘fully resolve the issue’.

The standoff has raised fresh concerns over the future of EU–China trade relations, weighing heavily on the single currency.

EUR sentiment was further dented by Germany’s latest producer price index, which showed another sharp annual contraction in factory gate prices through October, even if the decline was slightly less severe than analysts expected.

While the Pound (GBP) managed to outperform a weakened Euro, it struggled to gain traction against most other major currencies as caution dominated ahead of the UK’s upcoming autumn budget.

Chancellor Rachel Reeves is due to present the budget on 26 November 2025, and uncertainty continues to surround how she plans to address the sizeable fiscal deficit while staying within the government’s fiscal rules.

Investors remain wary that any combination of tax increases and spending restraint could complicate the UK’s already fragile economic outlook.

At the same time, Sterling remains weighed down by growing expectations that the Bank of England (BoE) will lower interest rates at its December meeting.

GBP/EUR Forecast: Eurozone and UK PMIs in the Spotlight

Looking to the end of the week, the Pound to Euro exchange rate is likely to be driven by the latest PMI releases from the Eurozone and the UK.

Flash estimates for November suggest the Eurozone’s private sector may show continued signs of resilience, which could offer the Euro some support if confirmed.

Conversely, UK PMIs are expected to signal a slowdown in business activity, with retail sales for October also projected to stagnate — a combination that may leave the Pound struggling as the week draws to a close.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Euro Forecasts