GBP/EUR exchange rate week review: pound breaks through 1.16 resistance level versus euro
11/08/2025 to 15/08/2025: The pound climbed above the key 1.16 level against the euro, buoyed by upbeat UK jobs and GDP data, while the single currency was weighed down by eurozone sentiment and caution ahead of Trump-Putin peace talks.
Monday
The pound euro (GBP/EUR) exchange rate traversed the 1.15 mid-range ahead of the UK’s latest retail sales, employment and GDP figures – economic indicators that could reinforce or undermine the Bank of England’s (BoE) monetary policy stance.
The euro was supported by cautious optimism over upcoming peace talks between US President Donald Trump and Russian President Vladimir Putin. Although there was uncertainty about the outcome, investors were watching to see if the meeting could initiate progress toward resolving over three years of conflict in Europe.
Tuesday
The pound rose to within touching distance of the 1.16 benchmark against the euro following a stronger-than-anticipated UK jobs print, leading investors to further scale back expectations for more BoE rate cuts. Although the data indicated a cooling labour market, the deceleration was milder than anticipated, supporting the UK currency.
A sharper-than-expected fall in German economic sentiment initially dented the euro, before a steep decline in the dollar prompted a strong recovery.
Wednesday
The pound strengthened as tailwinds from hawkish BoE interest rate expectations continued to provide support. The UK currency also benefited from the relative weakness of most of its currency peers.
The single currency lacked a clear direction amid caution ahead of the anticipated meeting between Trump and Putin. Investors feared that an agreement between Washington and Moscow might risk marginalising European interests and compromising regional stability.
Thursday
The pound euro rate edged above 1.16 following the release of better-than-expected GDP figures for the second quarter.
The British economy grew 0.3% in the three months to June, exceeding the 0.1% forecast, but the UK currency only rose slightly as growth slowed from 0.7% in the first quarter.
Euro sentiment continued to be soured ahead of talks on Ukraine between the US and Russia. The single currency was also undermined by its inverse relationship with a firming dollar.
Friday
With no major UK economic data scheduled for release, the pound drifted below the 1.16 level against the euro.
Renewed Trump-Putin peace talk optimism helped the euro trim some of its losses as traders awaited the outcome of the highly anticipated meeting.
The pound euro exchange rate ended the week at around 1.158.
Looking ahead
A raft of notable UK economic data hits the headlines this week, including the Consumer Price Index for July on Wednesday. UK inflation has risen steadily over the past year, running at 3.6% in June. The latest figures may show that the pace of price growth accelerated to 4% in July – an outcome that could prompt investors to scale back bets on further BoE rate cuts, potentially supporting the pound.
Eurozone inflation figures on Wednesday could reinforce the case for the European Central Bank (ECB) to pause its easing cycle, providing support for the single currency.