Pound to Euro Hits Best Exchange Rate in 28 Months

Modified: Wednesday, 7 October 2026 22:01 BST - Written by David Woodsmith

STORY LINK Pound to Euro Hits Best Exchange Rate in 28 Months

The Pound Euro (GBP/EUR) exchange rate climbed to a fresh 28-month high on Wednesday, as renewed turmoil in French bond markets put further pressure on the single currency.

At the time of writing, GBP/EUR was trading at €1.1814, up 0.2%, although the pair had eased back from its session high of €1.1832.

The Euro (EUR) came under renewed pressure on Wednesday as attention shifted away from a stronger-than-expected recovery in German industrial production in August and back towards mounting tensions in France’s bond market.

French government bonds resumed their selloff during the week, erasing the limited gains recorded on Tuesday.

The renewed rise in borrowing costs has raised concerns that financial stress in France could spread across the wider Eurozone, reviving fears of a broader debt crisis.

The Euro also faced an additional headwind from a strengthening US Dollar (USD), with the two currencies’ historically strong negative correlation adding to the pressure on EUR.

The Pound (GBP) was largely subdued on Wednesday, with the continued absence of UK economic data leaving Sterling without a clear catalyst for direction.

The lack of fresh domestic signals saw GBP lose ground against several of its peers.

However, the Pound still climbed to a fresh 28-month high against the weaker Euro before subsequently surrendering some of its gains.

Near-Term GBP/EUR Forecast: Economic Data and Central Bank Signals Ahead

Looking ahead, Germany’s latest trade figures are due on Thursday, with forecasts pointing to a recovery in both imports and exports that could provide some support for the Euro.

The focus will then shift to the European Central Bank’s (ECB) minutes from its September monetary policy meeting.

A hawkish tone from policymakers could lend further strength to the single currency.

European bond markets are also likely to remain an important influence on EUR.

Continued concerns over France’s rising debt burden and the potential for financial stress to spread across the wider Eurozone could put pressure on the Euro.

However, a decline in French bond yields could help the currency regain ground.

For the Pound, Bank of England (BoE) policymakers Megan Greene and Clare Lombardelli are both scheduled to speak.

Any indications that the BoE could raise interest rates in November may offer Sterling some support.

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TAGS: Pound Euro Forecasts