Pound to Euro Exchange Rate (GBP/EUR) Rises on Risk-On Market Sentiment

The Pound to Euro exchange rate (GBP/EUR) climbed on Monday, recovering from recent losses as a risk-on market mood boosted the British Pound (GBP) against the safer Euro (EUR). At the time of writing, GBP/EUR traded at €1.1579, up 0.5% on the day.

Key Drivers Behind GBP/EUR Exchange Rate Movement

1. Risk Appetite Supports Sterling (GBP)

The Pound Sterling (GBP) gained strength as investors turned to risk-sensitive currencies following easing concerns over US-China trade tensions. Markets welcomed news that Chinese electronics would be exempt from the 145% US tariffs, reducing fears of a broader economic slowdown.

2. Euro (EUR) Pressured by Safe-Haven Status

The Euro (EUR), often seen as a safe-haven currency, faced downward pressure as traders favored higher-risk assets. However, the EUR’s losses were limited due to its negative correlation with the weakening US Dollar (USD).

3. US Dollar Weakness Lends Support to EUR

The USD has struggled since former President Donald Trump proposed sweeping tariffs, raising concerns over a potential US recession and policy uncertainty. This USD decline helped cushion the Euro’s losses, allowing it to hold steady against weaker rivals.

Upcoming Economic Data That Could Impact GBP/EUR

Tuesday: UK Labour Market Report

• UK unemployment rate expected to hold steady.
• Wage growth forecast to accelerate slightly.
• Strong wage growth could delay Bank of England (BoE) rate cuts, supporting the Pound.

Wednesday: UK Inflation Data (CPI)

• March’s UK inflation expected to cool slightly.
• If inflation falls more than expected, BoE rate cut bets may rise, weakening GBP.

Tuesday: German ZEW Economic Sentiment Index

• German economic sentiment likely to decline in April.
• Concerns over a potential EU-US trade war could weigh on the Euro (EUR).

GBP/EUR Forecast: Will the Pound Hold Its Gains?

The Pound to Euro exchange rate remains sensitive to risk sentiment and central bank expectations. If UK wage growth beats forecasts, GBP/EUR could extend gains. However, a softer inflation reading or weaker German data could shift momentum back toward the Euro.

For the latest Pound Euro exchange rate updates and forex market analysis, stay tuned to our currency news coverage.