Pound to Euro Nears €1.19

Modified: Monday, 19 October 2026 20:01 BST - Written by David Woodsmith

STORY LINK Pound to Euro Nears €1.19

The Pound to Euro (GBP/EUR) exchange rate moved higher on Monday, with the single currency coming under pressure following a weekend of violent unrest across France.

At the time of writing, GBP/EUR was trading near €1.1890, marking a gain of approximately 0.3% since the start of Monday's session.

The Euro (EUR) came under fresh selling pressure on Monday as civil unrest across France added to concerns over the country's strained public finances and uncertain political future.

Clashes between demonstrators and police, widespread looting and a fire that badly damaged Limoges' historic town hall have added to the challenges facing President Emmanuel Macron's government.

The unrest comes as French policymakers attempt to secure parliamentary backing for a 2027 budget designed to rein in the country's substantial deficit.

With next year's presidential election approaching, reaching an agreement on spending cuts and other fiscal measures is proving increasingly difficult.

Investors are questioning whether the government can push through the reforms needed to put France's public finances on a more sustainable footing.

Any further deterioration in the political situation could make that task harder still.

These concerns have also unsettled France's bond market, prompting fears among Euro investors that mounting pressure on French debt could have wider implications for the Eurozone.

Sterling made gains against the Euro but struggled to establish much momentum elsewhere on Monday, as investors adopted a cautious stance ahead of several important UK economic releases.

The week's agenda includes the latest employment and inflation figures, followed by retail sales data and preliminary purchasing managers' index (PMI) readings later in the week.

Investors will be looking for signs of how the UK economy is coping with rising energy costs, while also assessing whether persistent inflationary pressures could prompt the Bank of England (BoE) to pursue a more forceful approach to monetary tightening.

Near-Term GBP/EUR Forecast: Further Labour Market Weakness Could Weigh on Sterling

Tuesday's UK employment report is likely to be a key driver for the Pound to Euro exchange rate in the coming sessions.

Economists anticipate that the unemployment rate will have edged higher in August, while wage growth is expected to have moderated.

Should the figures confirm a weakening labour market, expectations for further BoE interest rate increases could ease, potentially undermining demand for Sterling.

For the Euro, developments in France are likely to remain firmly in focus.

Continued unrest or further signs of fiscal and political instability could leave the single currency vulnerable to additional losses.

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TAGS: Pound Euro Forecasts