Pound to Euro Forecast Today: GBP/EUR Steady Ahead of ECB

January 30, 2025 - Written by Tim Boyer

STORY LINK Pound to Euro Forecast Today: GBP/EUR Steady Ahead of ECB

The Pound Sterling (GBP) held firm near its recent highs against the Euro (EUR) on Wednesday morning, with investors adopting a wait-and-see approach ahead of key events later this week.

At the time of writing, Pound Euro (GBP/EUR) exchange rate was trading at approximately €1.1937, showing little movement from Wednesday’s opening levels.

The Euro (EUR) remained flat on Wednesday as market participants refrained from making any aggressive bets ahead of the European Central Bank’s (ECB) latest interest rate decision.

The ECB is widely expected to cut interest rates by 25 basis points when it concludes its first policy meeting of 2025 on Thursday.

While the rate cut itself appears largely priced in, the Euro’s performance will likely hinge on the bank’s forward guidance.

Should ECB officials hint at further monetary easing in the months ahead, the single currency could face additional downside pressure.

Conversely, if policymakers suggest that they would prefer to hold off from further cuts for now, it may help stem losses in EUR exchange rates.

All eyes will be on ECB President Christine Lagarde’s comments, with investors seeking clarity on the central bank’s assessment of the Eurozone economy and its resilience amid ongoing global trade tensions.

The Pound (GBP) traded in a narrow range on Wednesday as UK Chancellor Rachel Reeves outlined her ambitious plans for boosting economic growth.

In her latest speech, Reeves unveiled proposals to establish a high-tech hub between Oxford and Cambridge, dubbed ‘Europe’s Silicon Valley,’ alongside renewed government backing for Heathrow’s third runway.

The government estimates these initiatives could contribute £78bn to the UK economy over the next decade.

However, Sterling’s reaction has been muted, with businesses seeming unconvinced as they still face the increased tax burden of Reeves’s previous Budget.

GBP/EUR Exchange Rate Forecast: Eurozone GDP Weakness to Weigh on the Euro?

The ECB’s policy decision is expected to dominate the movement in the Pound to Euro exchange rate on Thursday.

However, before the ECB announcement, the Euro could come under pressure from the Eurozone’s fourth-quarter GDP figures.

Economists predict growth slowed sharply, dropping from 0.4% to just 0.1%. Signs of a stalling Eurozone economy could amplify expectations for extended ECB easing, potentially dragging the Euro lower.

Meanwhile, the absence of major UK economic data through the second half of the week may leave the Pound’s movements tied to broader market sentiment.

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TAGS: Pound Euro Forecasts