Pound-to-Euro Forecast: EUR Stalls Ahead of Key PMI, PPI Releases

Modified: Wednesday, 5 August 2026 09:01 BST - Written by James Fuller

STORY LINK Pound-to-Euro Forecast: EUR Stalls Ahead of Key PMI, PPI Releases

The Pound to Euro (GBP/EUR) exchange rate posted modest gains on Tuesday, with the lack of meaningful economic data keeping volatility to a minimum.

At the time of writing, GBP/EUR was trading at around €1.1674, up approximately 0.1% on the day.

The Pound (GBP) traded in a narrow range on Tuesday as a lack of notable UK economic releases left Sterling without any clear direction.

Even so, the increasingly risk-sensitive Pound edged higher against some traditional safe-haven currencies as a cautiously positive appetite for risk offered GBP some support.

At the same time, higher energy prices may have encouraged markets to modestly increase expectations for further Bank of England (BoE) interest rate hikes, providing Sterling with additional backing.

The Euro (EUR) saw little movement on Tuesday as the absence of any notable Eurozone economic data left the single currency without fresh momentum.

With little to drive trading, the Euro remained confined to a tight range, although a modest recovery in the US Dollar (USD), to which EUR is negatively correlated, applied some downward pressure.

At the same time, EUR investors may have remained concerned about the economic consequences of the recent European heatwaves. Ongoing drought conditions and wildfires could affect agriculture, energy production and shipping.

Near-Term GBP/EUR Forecast: Final Services PMIs Could Drive Movement

Attention on Wednesday will turn to the final services PMI readings from the UK and the Eurozone, which may provide fresh direction for the Pound to Euro exchange rate.

Preliminary figures indicated that service sector activity returned to growth in both economies during July after shrinking in June. If the final data confirms that rebound, both the Pound and the Euro may find support.

That said, with the final manufacturing PMI figures revised lower, there is a possibility that the services data could also fall short of expectations.

Also due on Wednesday is the Eurozone's latest producer price index. A forecast decline of 0.3% could pressure the single currency if it reinforces expectations that inflationary pressures are continuing to ease across the bloc.

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TAGS: Pound Euro Forecasts