Pound to Euro Slips as Strong German Sentiment Supports EUR

Modified: Tuesday, 16 June 2026 21:01 BST - Written by David Woodsmith

STORY LINK Pound to Euro Slips as Strong German Sentiment Supports EUR

The Pound Euro (GBP/EUR) exchange rate softened on Tuesday, as upbeat German economic data helped to underpin the common currency.

At the time of writing, GBP/EUR was trading at €1.1556, down slightly on the day.

The Pound (GBP) was subdued on Tuesday, with investors wary of taking bold positions before a run of major UK events later in the week.

Wednesday’s UK inflation data could set the tone for Sterling, before a busy Thursday brings the latest jobs report, the Bank of England’s (BoE) interest rate decision and the Makerfield by-election.

With little in the way of domestic data on Tuesday, GBP was left without a clear catalyst, keeping movement limited.

Meanwhile, the Euro (EUR) found support on Tuesday after Germany’s latest economic sentiment figures beat expectations.

The ZEW economic sentiment index climbed to 10.5 in June, comfortably surpassing forecasts for a reading of -6.

This marked a 20.7-point jump from the previous month and delivered the first positive score since March, before the outbreak of war in the Middle East dented investor confidence.

Near-Term GBP/EUR Forecast: UK Inflation to Drive Pound Movement?

Looking ahead, Wednesday morning brings the UK’s latest consumer price index, which could inject fresh volatility into the GBP/EUR exchange rate.

Economists expect UK inflation to have ticked up from 2.8% in April to 3% in May. Should the reading meet forecasts, Sterling’s reaction may be limited, as a modest rise may not materially shift Bank of England interest rate expectations.

However, a stronger-than-expected inflation print could lift the Pound by reviving BoE rate hike bets. Conversely, softer figures may drag GBP lower.

For the Euro, the Eurozone’s final inflation reading is also due for release. Unless the figures are revised from the preliminary estimate, the data may have a muted impact on EUR.

Instead, EUR investors may pay closer attention to a speech from European Central Bank (ECB) President Christine Lagarde. Any hawkish remarks suggesting further tightening remains on the table could help the single currency strengthen.

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TAGS: Pound Euro Forecasts