Pound to Euro Rate Slips as FED Testimony to Drive Dollar Volatility

February 11, 2025 - Written by David Woodsmith

STORY LINK Pound to Euro Rate Slips as FED Testimony to Drive Dollar Volatility

The Pound-to-Euro exchange rate (GBP/EUR) was mostly quiet on Tuesday as a lack of both UK and Eurozone data releases saw the currency pairing trapped in a narrow range.

At the time of writing, the GBP/EUR was trading at around €1.19779, having slipped below the key 1.20 handle on Tuesday.

On Monday, the Pound (GBP) remained steady against most of its trading partners, even without any new economic data to influence the currency’s movement.

Despite the absence of fresh economic indicators, the GBP held its position, partly thanks to hawkish comments from Bank of England (BoE) official Huw Pill at the end of last week.

After the BoE's dovish interest rate cut on Thursday, Pill delivered a speech on Friday emphasising that the central bank is not yet ready to claim victory over inflation.

This change in tone decreased the chances of additional rate cuts from the BoE, offering Sterling a slight boost heading into Monday's European trading session.

On Monday, the Euro (EUR) failed to attract much investor interest and traded within a narrow range against most of its counterparts.

This was largely due to a lack of new economic data from the Eurozone and a cautiously optimistic market mood.

As a major safe-haven currency, the Euro's performance was affected by Monday’s cheery market mood and the absence of fresh data releases, causing it to waver and struggle to gain traction.

Looking ahead to Tuesday, the main driver of movement for the Pound Euro exchange rate will likely be several upcoming speeches from the Bank of England and the European Central Bank (ECB).

With no major economic data releases on the horizon, investors in both GBP and EUR may focus on the central bank speeches scheduled for Tuesday.

If either central bank delivers dovish statements, then the GBP/EUR exchange rate could see increased volatility as the week progresses.

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TAGS: Pound Euro Forecasts