Pound to Euro Tech Forecast: Break Above 1.1930, Gains to 1.2030

May 15, 2025 - Written by David Woodsmith

STORY LINK Pound to Euro Tech Forecast: Break Above 1.1930, Gains to 1.2030

The Pound Sterling to Euro exchange rate (GBP/EUR) has again been unable to break above 1.1900 and retreated to near 1.1860 despite an initial boost from the UK GDP data.

GBP sentiment remains broadly positive, but it will need to break resistance to make further headway.

SocGen looked at the technical outlook. As well as the barrier around 1.1900, it notes strong EUR/GBP support at the 0.8380 area where the 200-day moving average is situated. (1.1930 for GBP/EUR)

A break above this level would indicate the potential for further gains to 1.2030. ING also sees the potential for resistance to break.

MUFG does not expect the Euro to make much headway; “EUR/GBP has ticked a little higher this week but we see no reason for this to extend much over the short-term given the reasonably positive [UK] data released today.”

The latest UK monthly GDP data again beat consensus forecasts with 0.2% growth for April compared with expectations of no change and followed 0.5% growth for April.

GDP increased 0.7% for the first quarter of 2025 after a 0.1% gain previously and compared with expectations of 0.6% growth.


ING noted potential seasonal distortions and there was also a boost to GDP from stronger exports to the US ahead of the Trump tariffs.

HSBC UK economist Liz Martins noted positive components; "Business investment is up nearly 6% on the quarter and the service sector is doing well as well. So it's not just manufacturers selling to the US to get ahead of the tariffs."

There are still reservations surrounding April data and the second quarter as a whole.

Chancellor Reeves commented; "There's clearly economic headwinds, and the world is changing. We can see that all around us, but we are a strong economy.”

According to ING; “even if first-quarter GDP probably heavily overstates the underlying pace of growth. Uncertainty surrounding global trade is a headwind, though the direct impact of tariffs on the UK looks negligible. Remember too that government spending is rising significantly this year and that will be a firm tailwind.”

The bank added; “The strong start to 2025 suggests annual GDP growth should come in a touch above 1% this year, even if we start to see a repeat of the past few years, where momentum has faltered through the summer and autumn.”

The Euro-Zone GDP increase for the first quarter of 2025 was revised down to 0.3% from the flash reading of 0.4% with annual growth at 1.2%.


Germany recorded growth of 0.2% with a 0.1% advance for France.

With the US recording a slight contraction, the UK first-quarter performance was the strongest within the G7 area.

MUFG expects little immediate impact on monetary policy; “Given what happened in April, the BoE views risks to growth to the downside and hence the BoE is unlikely to alter its current policy plans that remain consistent with one 25bp cut per quarter.”

It added; “We would still expect front-end rates in the UK to tick a little higher when open which will help provide some moderate support for the pound.”

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TAGS: Euro Pound Forecasts