Euro to Pound Exchange Rate Steady as Markets Eye Ukraine Peace Talks

March 3, 2025 - Written by Tim Boyer

STORY LINK Euro to Pound Exchange Rate Steady as Markets Eye Ukraine Peace Talks

The Euro to Pound exchange rate (EUR/GBP) traded in a narrow range on Monday as optimism surrounding potential peace negotiations in Ukraine offered support to both currencies.

At the time of writing, GBP/EUR was trading at €1.2107, virtually unchanged from the morning’s opening level.

The Pound (GBP) edged higher against many of its peers on Monday as renewed optimism over a European-driven peace plan in Ukraine lifted market sentiment, benefiting the increasingly risk-sensitive UK currency.

European leaders continued to push forward with their own diplomatic efforts to end the Russia-Ukraine conflict, amid concerns that US President Donald Trump’s approach could sideline both Europe and Ukraine while favouring Russian interests.

As part of these discussions, French President Emmanuel Macron proposed a month-long ceasefire as a potential first step towards negotiations. The prospect of European-led diplomacy raised investor confidence on Monday, supporting GBP.

However, despite making gains against many of its counterparts, the Pound struggled to advance against the Euro (EUR) as the single currency also found support.

The Euro gained ground on Monday, bolstered by hopes of a European-led peace initiative in Ukraine. As the ongoing conflict has weighed heavily on the European economy, any steps towards resolution were seen as a positive for EUR.

Additionally, stronger-than-expected Eurozone inflation data underpinned the common currency. February’s consumer price index showed headline inflation at 2.4%, exceeding forecasts of 2.3%. However, as this still marked a slight slowdown from January’s 2.5%, the Euro’s upside was somewhat limited.

Looking ahead, Tuesday’s Eurozone unemployment rate release could influence the Euro. With joblessness expected to have remained just above a record low in January, the data may lend EUR some support.

Wednesday then brings the final services PMIs for both the Eurozone and the UK. Service sector activity is forecast to have slowed in the Euro area while picking up in the UK, which could put some pressure on the Euro and offer Sterling a lift. However, unless these figures diverge significantly from initial estimates, their impact may be limited.

Beyond data, geopolitical developments could also drive GBP/EUR movement. Further progress towards peace talks in Ukraine may support the Euro, while renewed tariff threats from Trump towards the EU could weigh on the common currency.

However, price action may be subdued in the coming days as EUR traders await the European Central Bank (ECB) interest rate decision on Thursday.

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TAGS: Euro Pound Forecasts