Pound Euro Exchange Rate Muted despite Upbeat Market Mood

February 20, 2025 - Written by David Woodsmith

STORY LINK Pound Euro Exchange Rate Muted despite Upbeat Market Mood

GBP/EUR was trapped in a narrow despite Thursday’s cheery trade and downbeat data releases.

At the time of writing, the Pound Euro exchange rate (GBP/EUR) was trading at around €1.2082, virtually unchanged from Thursday’s opening levels.

On Thursday, the Euro (EUR) failed to attract much investor interest and weakened against several of its major counterparts.

This downturn followed the release of Germany's latest producer price index (PPI), which showed a decline in January.

The latest PPI data dropped from 0.8% to 0.5%, contrary to the expected rise to 1.3%.

This unexpected drop in the PPI data dampened inflation expectations within the Eurozone, and combined with the generally positive market sentiment on Thursday, led to the Euro losing ground against other currencies.

On Thursday, the Pound (GBP) wavered against its other currencies after the release of the UK's latest BRC consumer confidence data.

The index showed a further decline this month, extending the streak to five consecutive months of falling confidence.

Despite an overall positive market sentiment and Sterling's growing sensitivity to risk, the Pound was unable to make any significant gains following the release.

As we move into Friday, the Pound Euro exchange rate will likely be heavily influenced by a series of economic data releases from both the UK and the Eurozone.

For the Pound, the UK is set to unveil its January retail sales index and the preliminary services and manufacturing PMIs for February.

Given the possibility of mixed data, GBP exchange rates may remain volatile as the week draws to a close.

On the Euro side, the Eurozone will also publish its preliminary services and manufacturing PMIs for February.

Any significant divergence from expectations could inject new volatility into the GBP/EUR exchange rate on Friday.

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TAGS: Pound Euro Forecasts