Pound-to-Euro Forecast: Calm Trade Leaves GBP Anchored Near €1.15

Modified: Monday, 26 January 2026 21:01 BST - Written by Ben Hughes

STORY LINK Pound-to-Euro Forecast: Calm Trade Leaves GBP Anchored Near €1.15

The Pound to Euro exchange rate (GBP/EUR) traded without clear direction on Monday, as underwhelming German data and a subdued broader market mood left the pairing rangebound.

At the time of writing, GBP/EUR was trading around €1.1527, little changed from its opening levels.

The Euro (EUR) struggled to find momentum at the start of the week after Germany’s latest Ifo business climate index disappointed. January’s reading remained stuck at 87.6 – its weakest level since May 2025 – instead of rising to the forecast 88.1, reinforcing concerns that the Eurozone’s largest economy has entered 2026 on shaky footing.

Even so, the single currency avoided notable losses. Support came from its inverse relationship with the US Dollar (USD), which remained on the defensive following last week’s sharp sell-off, offering EUR a modest cushion.

The Pound (GBP) also traded in a narrow range, with a lack of UK economic releases leaving Sterling short of fresh catalysts.

A mixed market backdrop weighed on the increasingly risk-sensitive Pound, preventing GBP from establishing a clear direction during the session. Some investors also appeared cautious amid reports of renewed internal tensions within the governing Labour Party.

Concerns surfaced after Prime Minister Keir Starmer and close allies reportedly moved to block Andy Burnham’s attempt to stand in a by-election, fuelling speculation that Starmer may be seeking to head off a potential leadership challenge from the Manchester Mayor.

GBP/EUR Forecast: Lagarde Speech in Focus

Looking ahead to Tuesday, a sparse economic calendar leaves EUR investors with few data releases to digest, placing the spotlight firmly on a speech from European Central Bank (ECB) President Christine Lagarde. Any insight into the inflation outlook or broader Eurozone economic conditions could influence the single currency.

Broader market dynamics are also likely to shape movement in GBP/EUR, particularly the Euro’s inverse relationship with the US Dollar. If the Greenback remains under pressure, it could offer some support to EUR.

At the same time, shifts in global risk sentiment will be key. A more optimistic market mood may favour the increasingly risk-sensitive Pound, while a defensive tone could lend support to the traditionally safer Euro.

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TAGS: Pound Euro Forecasts