Pound-to-Euro Dips as EUR Finds Support and Dollar Softens

Modified: Thursday, 4 December 2025 21:08 BST - Written by David Woodsmith

STORY LINK Pound-to-Euro Dips as EUR Finds Support and Dollar Softens

The Pound to Euro exchange rate (GBP/EUR) slipped on Thursday, giving back some of its recent gains after climbing to a one-month high the previous day. With no fresh UK data to lend support, Sterling was left vulnerable as traders moved to take profits.

At the time of writing, GBP/EUR was trading at €1.1426, slightly below Wednesday’s peak of €1.1440.

The Pound (GBP) edged lower on Thursday as investors locked in gains following GBP/EUR’s sharp climb to a one-month high. After Sterling’s swift upswing, some traders chose to bank profits, triggering a modest pullback.

With no fresh UK data to underpin sentiment, the Pound was exposed to broader market forces. Meanwhile, persistent discussion around the autumn budget continued to weigh on Sterling. Reports suggesting that pre-budget uncertainty had curbed investment, weakened consumer confidence, and slowed construction activity added to the cautious tone.

The Euro (EUR) found some support on Thursday, buoyed by its strong inverse relationship with a softening US Dollar (USD). As the ‘Greenback’ lost momentum, the single currency was able to gain modest ground.

However, renewed unease over fading prospects for peace between Russia and Ukraine limited the Euro’s upside. Recent diplomatic efforts had stirred cautious optimism, but rising geopolitical tension quickly overshadowed those earlier hopes.

Eurozone retail sales data provided little direction. October’s figures showed flat activity rather than the slight 0.1% uptick economists expected, although a small upward revision to September’s reading — from a 0.1% decline to 0.1% growth — offered minor consolation.

GBP/EUR Forecast: Soft German Data to Pressure Euro?

Friday opens with Germany’s latest factory orders report, where growth is forecast to slow from 1.1% to 0.5% in October. Any deceleration could weigh on the Euro, while a stronger- or weaker-than-expected result may spark sharper movement in GBP/EUR.

Markets will also assess the final estimate of Eurozone GDP for the third quarter. Any revisions could shift sentiment around the single currency, especially if they reinforce broader concerns about sluggish growth across the bloc.

Geopolitical developments remain another wildcard. With optimism over a potential US-backed Russia–Ukraine peace initiative fading amid renewed friction between Moscow and Brussels, the Euro may struggle to attract sustained support.

For the Pound, the absence of UK economic releases leaves Sterling without a clear driver, leaving GBP movement largely dictated by external market forces.

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TAGS: Pound Euro Forecasts