Pound to Euro Rate Rangebound as Eurozone Retail Sales Disappoint

Modified: Thursday, 4 June 2026 21:01 BST - Written by Minesh Chaudhari

STORY LINK Pound to Euro Rate Rangebound as Eurozone Retail Sales Disappoint

The Pound Euro (GBP/EUR) exchange rate struggled to find a clear direction on Thursday, as markets assessed fresh geopolitical developments alongside the Eurozone’s latest economic releases.

At the time of writing, GBP/EUR was trading at €1.1551, marginally lower on the day.

The Euro (EUR) traded without a clear direction on Thursday as the single currency was pulled between competing influences.

EUR found some support from its strong negative correlation with the US Dollar (USD), after the ‘Greenback’ softened at the start of European trade. Hopes that a new ceasefire between Israel and Lebanon could open the door to renewed US-Iran peace talks weighed on safe-haven demand for USD, thereby lifting the Euro.

However, the common currency’s upside was capped by the Eurozone’s latest retail sales figures. Sales fell by 0.4% in April, worse than the 0.3% contraction forecast, pointing to continued pressure on consumer spending across the bloc.

That said, the previous month’s reading was revised sharply higher, from a 0.1% decline to 0.8% growth, which helped soften the impact of April’s weaker-than-expected result.

The Pound (GBP) struggled to find momentum on Thursday, as an absence of market-moving UK economic data left Sterling without a clear catalyst.

With no fresh domestic releases for GBP investors to digest, the British currency traded listlessly against many of its major peers.

The wider market mood also offered little support to the increasingly risk-sensitive Pound. While cautious hopes for renewed Middle East peace talks helped prevent a sharper deterioration in sentiment, lingering uncertainty kept investors from embracing riskier assets.

As a result, Sterling remained broadly muted through Thursday’s session.

Near-Term GBP/EUR Forecast: Eurozone GDP to Weigh on the Euro?

Looking ahead, the Euro may come under pressure at the end of the week as markets digest the Eurozone’s final estimate for first-quarter GDP.

Economists expect the data to confirm that growth across the bloc slowed sharply at the start of 2026, with GDP forecast to have expanded by just 0.1%.

Such a weak reading could undermine the Euro, as it may reinforce concerns about the Eurozone’s fragile economic outlook.

However, as this is the third estimate, the figures may have a limited impact unless they contain a notable revision from the previous reading.

For the Pound, Friday’s session brings little in the way of UK economic data, potentially leaving Sterling without a clear domestic driver.

That said, speeches from Bank of England (BoE) policymakers later in the day could inject some movement. Should the officials strike a broadly dovish tone, the Pound may struggle to attract support.

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TAGS: Pound Euro Forecasts