Pound-Euro Rises as German Retail Sales Disappoint

Modified: Monday, 1 June 2026 20:01 BST - Written by David Woodsmith

STORY LINK Pound-Euro Rises as German Retail Sales Disappoint

The Pound to Euro (GBP/EUR) exchange rate moved modestly higher on Monday as investors assessed the latest retail sales figures from Germany.

At the time of writing, the GBP/EUR exchange rate was trading at around €1.1555, up approximately 0.2% from the start of the session.

The Euro (EUR) struggled to gain momentum at the beginning of the week following the release of Germany’s latest consumer spending data.

Figures from Destatis showed retail sales fell by 0.3% in April. While this was slightly better than expectations for a 0.4% decline, it nevertheless marked another month of contraction. March’s figures were also revised higher, from a previous reading of –2% to –0.3%.

Despite the upward revisions and better-than-forecast result, EUR investors focused on the broader trend, with April marking the fourth consecutive monthly drop in sales volumes and highlighting ongoing pressure on household spending in Germany.

The single currency also faced additional pressure after the latest consumer expectations survey from the European Central Bank (ECB) showed inflation expectations were unchanged in April, offering little support for more aggressive policy tightening expectations.

The Pound (GBP) found some support on Monday after an upward revision to the UK’s final manufacturing PMI figures.

The May index was revised from 53.7 to 53.9, signalling the fastest pace of expansion in the sector for four years.

However, Sterling’s gains remained relatively restrained as economists questioned how durable the improvement may prove to be, with much of the recent strength attributed to businesses bringing forward orders in anticipation of future price increases linked to global conflict and supply disruptions.

Near-Term GBP/EUR Forecast: Eurozone Inflation Data in Focus

Looking ahead, attention will turn to the release of the Eurozone’s latest inflation figures, which could provide the next major catalyst for movement in the Pound to Euro exchange rate.

Preliminary data for May is expected to show consumer price growth accelerating again, with forecasts pointing to an annual inflation rate of 3.3%.

A stronger inflation reading is likely to reinforce expectations that the ECB could raise interest rates by 25 basis points at its next policy meeting, potentially offering fresh support to the Euro.

Meanwhile, with no major UK economic releases scheduled, Sterling may take its cue from broader market sentiment and developments elsewhere in the currency markets on Tuesday.

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TAGS: Pound Euro Forecasts