Pound-to-Euro Forecast: GBP/EUR Slips amid Surging Gilt Yields

April 9, 2025 - Written by Tim Boyer

STORY LINK Pound-to-Euro Forecast: GBP/EUR Slips amid Surging Gilt Yields

The Pound Euro exchange rate drifted lower on Wednesday as investor nerves were rattled by a resurgence in global trade tensions.

At the time of writing, GBP/EUR was trading at around €1.1624, down approximately 0.2% from the morning’s opening level, having briefly touched a low of €1.1578 earlier in the session.

The Euro (EUR) firmed on Wednesday, buoyed by a combination of safe-haven flows and weakness in the US Dollar (USD).

This came in response to a fresh wave of tariffs introduced by US President Donald Trump, including a steep 104% duty on select Chinese goods, which triggered fresh market anxiety.

The Euro’s strength was further bolstered by its inverse correlation with the US Dollar, which slipped as investors began to price in the economic cost of escalating trade tensions between Washington and Beijing.

Appetite for the Greenback also waned as concerns mounted over the credibility of US policy, with some market watchers questioning the long-term impact of Trump’s aggressive trade strategy.

The Pound (GBP) found itself on the back foot as soaring UK government bond yields stoked investor concerns.


A heavy selloff in UK bonds pushed the 30-year yield to its highest point since 1998, even surpassing the peak seen during the bond market turbulence earlier this year.

This placed additional strain on GBP sentiment as rising yields risk pushing up government borrowing costs and could complicate Chancellor Rachel Reeves’s fiscal plans, particularly her aim to stimulate growth while maintaining budget discipline.

Looking ahead, the Pound Euro exchange rate may remain under pressure through the end of the week as the fallout from Trump’s tariffs continues to ripple through global markets.

Safe-haven flows could continue to support the Euro if risk appetite remains subdued, while the Pound may face further losses if UK economic uncertainty deepens.

However, the publication of the UK’s monthly GDP data could offer Sterling some reprieve if February’s figures show a return to growth, helping to alleviate some recent concerns over the health of the British economy.

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TAGS: Pound Euro Forecasts