Pound-Euro Flat as Eurozone Inflation Fails to Lift EUR

Modified: Tuesday, 2 June 2026 22:01 BST - Written by Frank Davies

STORY LINK Pound-Euro Flat as Eurozone Inflation Fails to Lift EUR

The Pound Euro (GBP/EUR) exchange rate traded in a tight range on Tuesday, as the Eurozone’s latest inflation figures failed to deliver a meaningful lift to the single currency.

At the time of writing, GBP/EUR was trading at €1.1567, virtually unchanged on the day.

The Euro (EUR) strengthened against some of its weaker peers on Tuesday, although its gains were limited after the Eurozone’s latest inflation data failed to spark any significant EUR upside.

May’s consumer price index largely matched expectations. Headline inflation rose from 3% to 3.2%, as forecast, while core inflation increased from 2.2% to 2.5%, slightly above the expected 2.4%.

However, the figures did little to shift European Central Bank (ECB) interest rate hike expectations. As a result, the Euro was unable to make meaningful gains against its stronger rivals.

Meanwhile, the Pound (GBP) traded unevenly on Tuesday, with a quiet UK data calendar leaving Sterling at the mercy of broader market sentiment.

Amid a risk-on mood, the increasingly risk-sensitive UK currency managed to firm against many of its safer rivals.

However, the Pound lost ground against higher-risk currencies as investors favoured more upbeat assets.

Near-Term GBP/EUR Forecast: Final Services PMIs in the Spotlight

Looking ahead, Wednesday’s session will bring the final services PMIs from both the UK and the Eurozone.

In the Eurozone, the latest index is expected to confirm that activity across the bloc’s services sector fell further into contraction in May.

The UK reading may attract even closer attention, with economists expecting the services PMI to fall sharply from 52.7 to 47.9, pointing to a notable contraction.

If the figures print in line with forecasts, the Pound Euro exchange rate could trade without a clear direction. However, Sterling may face the greater pressure if the data underlines a sharper downturn in the UK’s dominant services sector.

Any revisions to the preliminary PMI results could spark more pronounced movement.

Elsewhere, the Euro may find support if April’s Eurozone producer price index shows a sharp rise, as expected. A hotter PPI reading could reinforce expectations for an ECB interest rate hike next week.

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TAGS: Pound Euro Forecasts