Pound and Euro Rangebound as Policy Announcements Loom

Modified: Wednesday, 18 March 2026 18:01 BST - Written by Tim Boyer

STORY LINK Pound and Euro Rangebound as Policy Announcements Loom

The Pound Euro (GBP/EUR) exchange rate traded in a narrow range on Wednesday, as investors held off from making decisive moves ahead of key central bank announcements.

At the time of writing, GBP/EUR hovered around €1.1573, showing little meaningful movement from the start of the session.

The Pound traded sideways, with a lack of fresh UK economic data leaving Sterling without clear direction.

In the absence of domestic catalysts, investors appeared reluctant to take positions, instead opting to hold back ahead of the Bank of England’s upcoming interest rate announcement and the latest UK employment figures.

As a result, GBP exchange rates remained confined to a tight range, with limited momentum either higher or lower.

The Euro saw limited movement, as markets remained cautious ahead of the European Central Bank’s policy decision.

The Eurozone’s final consumer price index had little impact after confirming initial estimates. Headline inflation rose from 1.7% in January to 1.9% in February, matching expectations.

With no surprises from the data, Euro investors largely refrained from making significant moves, instead waiting for clearer signals from the upcoming European Central Bank announcement.

Short-Term GBP/EUR Forecast: Central Bank Decisions in Focus

The session opens with the UK’s latest labour market data. Forecasts point to a rise in unemployment alongside softer wage growth, which may weigh on the Pound in early trade.

Attention will then shift firmly to the Bank of England’s policy announcement. While interest rates are widely expected to remain unchanged amid elevated energy prices, investors will be focused on forward guidance.

Should policymakers signal that the Middle East crisis is adding upside risks to inflation and therefore reducing the scope for near-term rate cuts, Sterling could find some support. That said, concerns over the strain of higher costs on the UK economy may temper any gains.

Later in the day, the European Central Bank will also deliver its latest decision. Like the Bank of England, the ECB is expected to hold rates steady, but any acknowledgement of rising inflationary pressures could underpin the Euro.

However, with inflation in the Eurozone still running below target compared to above-target price growth in the UK, any suggestion the ECB is more comfortable absorbing higher inflation could tilt the balance in favour of GBP/EUR.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Euro Forecasts