Pound-to-Euro Forecast: GBP Edges Higher after Weak Eurozone Retail Data

Modified: Friday, 7 August 2026 09:31 BST - Written by Tim Boyer

STORY LINK Pound-to-Euro Forecast: GBP Edges Higher after Weak Eurozone Retail Data

The Pound to Euro (GBP/EUR) exchange rate advanced slightly on Thursday as disappointing Eurozone data undermined demand for the single currency.

At the time of writing, the GBP/EUR exchange rate was trading at around €1.1665, up modestly from Thursday’s opening levels.

The Euro (EUR) lost ground on Thursday after the latest Eurozone retail sales report pointed to an unexpected deterioration in consumer spending.

Figures released by Eurostat showed retail sales shrank by 0.3% in June, reversing May’s 0.4% increase and falling well short of forecasts for a 0.1% rise.

The weaker-than-expected data raised fresh concerns over the health of household demand across the bloc, prompting investors to reassess expectations for further European Central Bank (ECB) policy tightening.

The Euro’s losses were tempered somewhat by Germany’s latest factory orders report, which revealed industrial demand expanded by a stronger-than-anticipated 3.1% during June.

The Pound (GBP) traded without a clear bias on Thursday as the absence of UK economic data kept volatility subdued.

With few domestic developments to influence sentiment and UK gilt yields holding broadly steady, Sterling lacked a strong catalyst for movement.

At the same time, investors were reluctant to make significant moves ahead of Friday’s US non-farm payrolls release, resulting in subdued trading across the major currency pairings.

Near-Term GBP/EUR Forecast: German Trade Figures to Influence the Euro?

Looking ahead to Friday, the Pound to Euro exchange rate could extend its gains if Germany’s latest trade figures paint a weaker picture of the Eurozone’s largest economy.

Markets expect Germany’s trade surplus to narrow in June as export growth softened, a development that may weigh on confidence in the single currency.

Germany’s industrial production figures could also pressure the Euro if they confirm manufacturing activity lost momentum toward the end of the second quarter.

Meanwhile, with no significant UK economic releases due before the weekend, Sterling’s direction is likely to remain tied to broader market sentiment.

If global energy prices continue to ease and UK gilt yields decline further, the Pound may receive some additional support.

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TAGS: Pound Euro Forecasts