Pound to Euro Holds Near €1.15 as Dollar Slumps

Modified: Monday, 12 January 2026 21:01 BST - Written by Frank Davies

STORY LINK Pound to Euro Holds Near €1.15 as Dollar Slumps

The Pound to Euro exchange rate (GBP/EUR) traded without clear direction on Monday, as investors weighed up fresh comments from the US regarding Greenland’s future.

At the time of writing, GBP/EUR was hovering around €1.1525, little changed on the day.

Euro (EUR) Wobbles amid Geopolitical Concerns

The Euro (EUR) traded unevenly at the start of the week, as investors reacted to renewed geopolitical noise surrounding Greenland.

Comments from US President Donald Trump late on Sunday unsettled markets after he claimed the US would take control of Greenland ‘one way or the other’, reviving speculation that Washington could even contemplate military action against Denmark, a fellow NATO ally.

The remarks underscored simmering strains between the US and the EU at a delicate moment, with Brussels still looking to Washington for backing in efforts to bring the Russia-Ukraine conflict to an end. These tensions limited demand for the single currency.

That said, losses in the Euro were kept in check by its strong inverse relationship with the US Dollar (USD). As the ‘Greenback’ weakened on Monday, EUR was able to find a measure of underlying support despite the uneasy political backdrop.

Pound (GBP) Holds Firm despite Sparse Data

The Pound (GBP) traded in a narrow range on Monday, as a quiet UK data calendar and a cautious broader market environment limited volatility.

With no high-impact domestic releases to guide direction, the increasingly risk-sensitive currency struggled to find momentum. Even so, Sterling proved relatively resilient, managing to hold its ground – and in some cases tick higher – against softer counterparts.

This steadiness came despite an absence of clear fundamental drivers, suggesting that a lack of selling pressure helped the Pound remain supported amid subdued trading conditions.

GBP/EUR Exchange Rate Forecast: Geopolitics Stays Centre Stage

Looking ahead, a sparse economic calendar in both the Eurozone and the UK on Tuesday may leave the Pound Euro exchange rate driven primarily by broader market sentiment rather than hard data.

For the Euro, attention is likely to remain on developments surrounding Greenland. Markets are braced ahead of a scheduled meeting on Wednesday between the Foreign Ministers of Greenland and Denmark and the US Secretary of State. Any renewed rhetoric from the Trump administration hinting at a willingness to pursue military options could place fresh pressure on the single currency.

Separately, headlines linked to the Russia-Ukraine war may continue to influence EUR exchange rates, with the protracted conflict acting as a lingering headwind for the Euro.

On the Pound side, Sterling’s scope for gains against the Euro could be limited. Geopolitical uncertainty does not stop at the UK’s borders, and a cautious or risk-off mood in markets may curb demand for the increasingly risk-sensitive British currency.

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TAGS: Pound Euro Forecasts