GBP/EUR exchange rate week review: pound touches multi-week high against euro
26/05/2025 to 30/05/2025: Having hit a multi-week high against the euro, the pound plummeted amid dollar weakness that supported the single currency.
Monday
The pound euro (GBP/EUR) exchange rate, which started the week at around 1.19, was subdued due to an empty economic calendar during the bank holiday.
Tuesday
The pound was mixed as markets assessed the International Monetary Fund’s (IMF) latest health check of the UK economy – initially touching a seven-week high in the 1.19 mid-range before softening.
Although its growth forecast for 2025 was increased slightly from 1.1% to 1.2%, the IMF warned of economic headwinds and urged Chancellor Rachel Reeves to ease her fiscal policies to avoid emergency spending cuts.
The euro was also mixed due to its negative trading relationship with a firming dollar, which offset a larger-than-expected improvement in Eurozone economic sentiment and US tariff delays.
Wednesday
The pound euro exchange rate traded without a clear direction amid an ongoing lack of UK economic data.
The euro softened slightly following the release of a downbeat German employment report. Despite the jobless rate holding steady, the number of unemployed people spiked by 34,000 – the sharpest increase since July 2022.
Thursday
The pound reached a fresh multi-week high in the 1.19 mid-range against the euro but subsequently declined by nearly 1% as the euro benefitted from its strong negative correlation with a weakening dollar.
Friday
The pound euro exchange rate was choppy, initially firming before dropping into the 1.18 mid-range following hawkish European Central Bank (ECB) signals that supported the single currency.
ECB governing council member Fabio Panetta stated that the central bank has less scope for additional interest rate cuts. He emphasised the importance of maintaining a practical and adaptable approach by making future decisions on a case-by-case basis.
Looking ahead
The ECB is expected to lower interest rates on Thursday, with policymakers waiting until July to pause for the first time in a year, despite a weak economy at risk from the US-led trade war. The impact of a dovish move on the euro could be diluted if the ECB’s forward guidance points to a rate hold.