Pound to Euro Rate Rises on UK GDP, German Inflation up Next

February 13, 2025 - Written by David Woodsmith

STORY LINK Pound to Euro Rate Rises on UK GDP, German Inflation up Next

The Pound Euro exchange rate (GBP/EUR) was trapped in a narrow on Wednesday amid a lull in data releases from both the UK and the Eurozone.

At the time of writing, the GBP/EUR was trading at around €1.19844, after UK GDP data printed above forecast.

On Wednesday, the Pound (GBP) failed to capture much investor attention and remained in a tight trading range against most of its counterparts as a lack of economic data left GBP exchange rates trading without a clear direction.

Investors may have hesitated to make bold moves on Sterling, anticipating significant data release the next day.

On Thursday, the UK revealed the latest preliminary GDP figures for the fourth quarter of 2024. UK recession fears eased as economy was shown to have grown by 0.1% in the October to December 2024 trading period.

Like the Pound, the Euro (EUR) was affected by the absence of domestic data releases on Wednesday, leading to EUR exchange rates to trade without a clear direction.

However, the Euro received some modest support on Wednesday, from the downbeat market mood.

As a safe-haven currency, the Euro benefited slightly from the negative trading conditions, particularly against its riskier counterparts.

The main driver of movement for the Pound Euro exchange rate in the near-term outlook is the release of significant data from both the UK and the Eurozone.

The UK published its latest GDP figures, which saw a positive boost to the GBP exchange rates.

In the Eurozone, Germany, the bloc’s largest economy, will release its latest consumer price index (CPI).

If the final inflation reading for January indicates a cooldown as expected, this could also undermine the Euro should the data lead to an increase in European Central Bank (ECB) interest rate cut bets.

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TAGS: Pound Euro Forecasts