Pound-to-Euro Rate Rises Despite Advancing EUR/USD Amid Tariff Chaos

April 14, 2025 - Written by Frank Davies

STORY LINK Pound-to-Euro Rate Rises Despite Advancing EUR/USD Amid Tariff Chaos

The Pound Euro (GBP/EUR) exchange rate climbed on Monday, clawing back a portion of its recent sharp declines, as an upbeat mood across global markets lifted Sterling against the safer Euro (EUR).

The Pound (GBP) found solid footing on Monday, benefitting from a surge in market optimism that bolstered demand for the increasingly risk-sensitive UK currency.

Investors welcomed news that Chinese-made electronics would not be subject to the steep 145% tariffs recently introduced by the United States as part of the growing Sino-American trade dispute. The exemption helped ease worries about the global economic outlook, encouraging a move towards riskier assets like the Pound.

At the same time, the Euro faced headwinds as the improved mood prompted traders to steer away from safer investments.

That said, the single currency found some support thanks to its traditionally inverse relationship with the US Dollar (USD), which extended its recent slide. This dynamic softened the Euro’s losses and even allowed it to advance against a few weaker counterparts.

The Dollar has been struggling under the weight of market concerns, fuelled by the Trump administration’s aggressive tariff strategy, growing recession fears, and doubts over Washington’s policy direction. This sustained weakness in USD provided the Euro with some support at the start of the week.

Looking ahead, the Pound could extend its recovery in the days to come, depending on the outcome of upcoming UK employment figures set for release on Tuesday. Analysts are forecasting that unemployment will remain steady while wage growth ticks higher, which could discourage speculation of a May interest rate cut from the Bank of England (BoE) and offer the Pound fresh support.


However, any upside for Sterling might be short-lived if Wednesday’s UK inflation report triggers renewed rate cut expectations. Economists are currently anticipating a slight cooling of price growth in March.

Meanwhile, the Euro could come under pressure amid Germany’s ZEW economic sentiment index, also due on Tuesday. After a strong rebound driven by post-election optimism and hopes for fiscal reform, sentiment is widely expected to take a hit this month amid concerns that escalating EU-US trade tensions could dent growth prospects.

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TAGS: Pound Euro Forecasts