Pound-to-Euro Drifts toward €1.15

Modified: Friday, 9 January 2026 08:01 BST - Written by Tim Boyer

STORY LINK Pound-to-Euro Drifts toward €1.15

The Pound to Euro exchange rate (GBP/EUR) edged lower on Thursday as investors reacted to unexpectedly strong economic data from Germany, which offered the single currency some rare support.

At the time of writing, GBP/EUR was trading around €1.1507, roughly 0.2% below the session’s opening levels and drifting closer to the €1.15 mark.

The Euro (EUR) found modest support after the release of upbeat German factory orders data.

Figures from Destatis showed that German factory orders surged by 5.6% in November, following a 1.6% rise in October and far exceeding expectations for a 1% contraction. A large portion of the increase was attributed to defence-related orders, reflecting efforts across Europe to boost military capacity.

For EUR investors, the data provided a rare note of optimism, hinting that Germany’s prolonged industrial downturn may be showing early signs of stabilisation.

However, gains in the single currency were limited. Lingering concerns over European security — linked to the ongoing war in Ukraine and renewed unease over US ambitions regarding Greenland — continued to weigh on sentiment. The Euro was also held back by the latest Eurozone economic sentiment index, which fell more sharply than expected to a three-month low in December.

The Pound (GBP), meanwhile, struggled to find support as a quiet UK data calendar offered little to attract fresh buying interest.

Sterling sentiment was further clouded by mixed commentary from UK retailers on the all-important Christmas trading period. While some firms reported an improvement in footfall, many noted that this failed to translate into stronger profits as households remained cautious with spending.

These signals left GBP investors weighing the implications for UK growth in the final quarter of 2025 and how softer consumer demand might influence Bank of England policy decisions in early 2026.

GBP/EUR Forecast: Further German Strength to Favour the Euro?

Looking ahead to Friday, the Pound Euro exchange rate may remain sensitive to further releases from Germany, including the latest industrial production and trade data.

If industrial output mirrors the strength seen in factory orders, it could reinforce confidence in Germany’s manufacturing sector and provide additional support for the Euro.

However, any upside may prove limited if trade figures show export growth stalled over the same period.

On the UK side, the absence of major economic releases leaves Sterling exposed to broader market dynamics. A recovery in GBP/EUR is possible if weak US payrolls data undermines the US Dollar and lifts overall risk appetite, though in the near term the Pound may continue to lack a clear domestic catalyst.

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TAGS: Pound Euro Forecasts