Pound "Drifts Lower" Against Euro following ECB Interest Rate Decision

March 6, 2025 - Written by Tim Boyer

STORY LINK Pound "Drifts Lower" Against Euro following ECB Interest Rate Decision

Pound Sterling (GBP) was dented against the Euro (EUR) on Thursday following the European Central Banks (ECB) latest interest rate meeting.

The Pound to Euro exchange rate (GBP/EUR) was trading at around €1.1904, down roughly 0.3% from Thursday’s opening levels.

The Euro (EUR) exchange rates gained strength against most of its counterparts following the European Central Bank's latest interest rate decision.

As widely expected, the ECB cut the interest rate by 25 basis points, bringing it down from 2.75% to 2.5%.

However, during the subsequent press conference, ECB President Christine Lagarde took a more hawkish tone in her forward guidance.

She emphasised the need to be 'data-driven' in considering future interest rate cuts, which ultimately provided a boost to the common currency.

On Thursday, the Pound (GBP) held steady against most of its major trading partners as a lack of economic data left GBP exchange rates directionless.

The Pound also failed to gain momentum from the hawkish comments made by Bank of England (BoE) Governor Andrew Bailey the previous day.

Despite the central bank's hawkish position, Sterling remained largely unchanged after Bailey's remarks and throughout Thursday's European trading session.

As we move into Friday, the key factor influencing the Pound Euro exchange rate will likely be more economic data coming out of the Eurozone.

The Bloc is set to publish its latest GDP estimate for the final quarter of 2024, along with the most recent employment change figures.

Given that both indicators are expected to show a decline, this could put downward pressure on the Euro as the week concludes.

On the other hand, the Pound's economic calendar for Friday is relatively quiet, with no major domestic data releases scheduled.

As a result, Sterling is likely to continue to trade without a clear direction as the week wraps up.

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TAGS: Pound Euro Forecasts