Pound to Euro Rises Despite Upbeat German Data

Modified: Monday, 6 July 2026 20:01 BST - Written by David Woodsmith

STORY LINK Pound to Euro Rises Despite Upbeat German Data

The Pound Euro (GBP/EUR) exchange rate ticked higher on Monday, as the Euro (EUR) struggled to benefit from a stronger-than-expected rebound in German factory orders.

At the time of writing, GBP/EUR was trading at €1.1686, marginally higher on the day.

The Euro lost ground on Monday, even after Germany’s latest factory orders figures came in above expectations.

Factory orders in the Eurozone’s largest economy rose by 1.9% in May, comfortably outpacing forecasts of a 1.2% increase. April’s contraction was also revised higher, from -3.8% to -3.2%, suggesting the downturn was not quite as severe as first reported.

However, the common currency was unable to capitalise on the upbeat German release. A firmer US Dollar (USD) weighed on EUR sentiment, reflecting the strong negative correlation between the two currencies.

At the same time, weaker-than-expected Eurozone retail sales kept the Euro on the defensive. Sales across the bloc rose by just 0.2% in May, falling short of the 0.3% forecast and limiting demand for the single currency.

The Pound (GBP) edged higher on Monday, with Sterling drawing support as investors continued to unwind the political risk premium that had weighed on the UK currency in recent weeks.

Markets appear increasingly confident that MP Andy Burnham will become the next Prime Minister, with the prospect of a rapid handover helping to ease concerns over a prolonged and destabilising leadership race.

Burnham has sought to reassure investors since entering the Labour leadership contest, pledging to uphold the government’s current fiscal rules while setting out a more ambitious vision for UK economic growth.

This has helped soothe GBP sentiment, allowing the Pound to strengthen as fears over domestic political disruption continue to recede.

Near-Term GBP/EUR Forecast: Could German Production Data Weigh on the Euro?

Looking ahead, Germany’s latest industrial production figures are set to headline Tuesday’s European session. A weaker reading for May could reinforce concerns over the Eurozone’s largest economy and leave the Euro on the back foot.

Meanwhile, the UK data calendar is notably quiet, which may limit movement in the Pound.

As a result, Sterling could take its cues from domestic political developments. Any headlines surrounding the next stage of Labour leadership nominations may help shape GBP sentiment.

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TAGS: Pound Euro Forecasts