Pound to Euro Today: Exchange Rate Holds Steady on Softer Dollar

February 5, 2025 - Written by Tim Boyer

STORY LINK Pound to Euro Today: Exchange Rate Holds Steady on Softer Dollar

Pound Sterling traded without a clear direction against the Euro on Tuesday amid an absence of data releases from both the UK and the Eurozone.

At the time of writing, the GBP/EUR was trading at around €1.2012, marginally lower from Wednesday’s opening levels.

On Tuesday, the Pound (GBP) had a tough time capturing investor interest, largely because there was no new UK economic data to drive its performance.

This absence of data releases left the GBP exchange rates vulnerable to the day's overall market mood.

Given Sterling's growing sensitivity to risk, the Pound managed to maintain its position against riskier currencies, however, lost its ground against safer alternatives amid Tuesday’s risk averse trade.

Investors also likely held back from making significant moves on Sterling, anticipating the Bank of England's (BoE) upcoming interest rate decision later this week, where a 25-basis-point rate cut is widely expected.

The Euro (EUR) recovered most of its losses from Monday after US President Donald Trump announced that tariffs on the Eurozone were ‘definitely coming.’

However, on Tuesday, the single currency held its ground and even gained strength against several of its peers, thanks to a cautious trading environment.

Despite the lack of significant economic data, the Euro benefited from the downbeat market sentiment thanks to its status as a safe-haven currency.

Looking ahead to Wednesday, the primary factor influencing the Pound Euro exchange rate will likely be several key publications from the Eurozone.

The Eurozone is set to release its latest PPI data, the finalised PMI data for January, and Germany’s finalised PMI data for the same month.

If any of these data releases deviate from market expectations, EUR exchange rates could face pressure during mid-week trade.

Turning to the Pound, the UK is scheduled to publish its own finalised Services PMI for January.

Should the data indicate that this critical sector continued to expand (with a reading above 50), it could offer some modest support to Sterling.

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TAGS: Pound Euro Forecasts