Pound-to-Euro Rate Volatile as Trump Tariffs Rattle Markets

Modified: Tuesday, 24 February 2026 20:46 BST - Written by David Woodsmith

STORY LINK Pound-to-Euro Rate Volatile as Trump Tariffs Rattle Markets

The Pound Euro (GBP/EUR) exchange rate seesawed on Tuesday as renewed trade tensions unsettled investors.

At the time of writing, GBP/EUR was trading at €1.1443, after swinging in a narrow but uneasy range from Monday evening into Tuesday’s European session.

The Pound wavered after fresh trade jitters unsettled investors. US President Donald Trump’s newly implemented 10% global tariff came into force, prompting markets to reassess the outlook for international commerce.

For Sterling traders, the bigger concern was speculation that the White House could raise those tariffs to 15%. Such a move would risk complicating the US-UK agreement struck last summer, which had set a 10% levy on selected British exports to the United States. Any threat to that arrangement injected a fresh dose of uncertainty into the outlook for UK trade.

Domestic politics added to the cautious mood. Attention turned to the upcoming by-election in the Greater Manchester constituency of Gorton and Denton, widely viewed as an important moment for Prime Minister Keir Starmer. With approval ratings subdued and signs of unease within the Labour Party, the vote is being treated as a barometer of the government’s standing.

Meanwhile, economic data offered little reassurance. The latest Confederation of British Industry distributive trades survey surprised to the downside, reporting a sharper-than-expected decline and reinforcing concerns about the resilience of UK consumer activity.

The Euro found it difficult to build momentum against the Pound, as the single currency was also caught up in the latest wave of trade-related nerves.

Brussels opted to delay formal approval of last year’s EU-US trade agreement after President Trump’s new tariff measures cast doubt over the direction of Washington’s policy. The lack of clarity surrounding potential changes to existing arrangements left EUR investors wary, with uncertainty lingering into Tuesday’s session.

Geopolitics added another layer of caution. Comments from Kremlin spokesperson Dmitry Peskov signalled that Russia intends to press ahead with its military objectives in Ukraine, dampening risk appetite across European markets. Given the Eurozone’s geographical and economic proximity to the conflict, renewed tensions curbed demand for the Euro.

GBP/EUR Forecast: German Confidence and Growth Data in Focus

The Pound Euro exchange rate may see fresh direction as a cluster of German and Eurozone releases cross the wires.

The Euro could draw support from Germany’s latest GfK consumer confidence survey, with forecasts pointing to an improvement in sentiment heading into March. As the Eurozone’s largest economy, Germany often sets the tone for wider bloc morale, so any upside surprise may bolster the single currency.

Investors will also digest the final reading of Germany’s fourth-quarter 2025 GDP alongside January’s Eurozone inflation figures. Expectations are for German growth to accelerate while inflation across the bloc is confirmed to have eased. In theory, stronger growth and softer price pressures pull in opposite policy directions, meaning the overall market reaction could hinge on any unexpected revisions.

The Pound faces a relatively sparse domestic calendar. With little in the way of fresh UK data, Sterling may trade cautiously ahead of Thursday’s Gorton and Denton by-election.

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TAGS: Pound Euro Forecasts