March 12, 2025 – Written by Frank Davies
STORY LINK Pound to Euro Today: GBP/EUR Rate Stuck at €1.18 as Ukraine Ceasefire Hopes Grow
The Pound remained near a six-week low against the Dollar on Wednesday as investors reacted to reports that Ukraine is open to a temporary ceasefire with Russia.
At the time of writing, the Pound to Euro (GBP/EUR) exchange rate was trading at approximately €1.1839, almost unchanged from Wednesday’s opening levels.
The Euro (EUR) found some support on Wednesday, following reports that Ukraine had reached a preliminary agreement with the US regarding a potential ceasefire with Russia.
Although Russia has yet to officially confirm its stance, markets welcomed the development as a positive step toward ending the prolonged conflict. This optimism lent some strength to the Euro as investors bet on greater economic stability in Europe.
However, the Euro’s upside was somewhat capped by fears of a looming trade war between the EU and the US.
After Washington introduced fresh tariffs on all steel and aluminium imports, the EU signalled that it will take the appropriate retaliatory measures.
With concerns that escalating trade tensions could weigh on the Eurozone’s already fragile economy, EUR investors remain cautious.
The Pound (GBP) was mostly flat on Wednesday as uncertainty over the Bank of England’s (BoE) next policy move kept traders hesitant.
While recent UK economic data has reinforced expectations that the BoE will keep interest rates steady in the near term, some analysts warn that global economic instability, particularly surrounding US trade policy under President Donald Trump, could push the bank toward a more accommodative stance.
The Pound’s lack of clear direction reflects this ongoing uncertainty, with GBP traders awaiting further clarity from policymakers.
Looking ahead, the Pound to Euro exchange rate may face further headwinds later this week as the UK’s latest GDP report is released.
Analysts anticipate that growth in January slowed to a crawl, potentially heightening concerns about the UK’s economic outlook. A weak reading could reinforce fears of stagnation and drag Sterling lower.
Meanwhile, Euro exchange rates are likely to remain sensitive to further developments regarding Ukraine and the risk of a US-EU trade dispute.
Additionally, comments from European Central Bank (ECB) policymakers throughout the week may influence EUR sentiment. If ECB officials signal a continued commitment to keeping interest rates high for longer, the Euro could extend its gains against the Pound.
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TAGS: Pound Euro Forecasts
