March 24, 2025 – Written by David Woodsmith
STORY LINK Pound-to-Euro Outlook Today: GBP Nears €1.20 vs EUR as Eurozone PMIs Disappoint
The Pound edged higher on the Euro on Monday following the release of PMI data from both the UK and the Eurozone.
At the time of writing, the Pound to Euro (GBP/EUR) exchange rate was trading at around €1.1961, up by nearly 0.2% from the start of Monday’s session.
The Euro (EUR) struggled to find support at the beginning of the week as investors reacted to disappointing PMI figures from the Eurozone.
Preliminary data for March revealed that the bloc’s services sector expanded at a slower-than-expected rate, while manufacturing activity remained in contraction territory, albeit at a reduced pace compared to February.
Overall, the figures indicated that the Eurozone’s private sector is growing at a sluggish pace, reinforcing concerns over the region’s economic recovery.
Economists suggest that the weak data may keep speculation alive regarding another potential European Central Bank (ECB) interest rate cut in April
Meanwhile, the Pound (GBP) saw modest gains as the UK’s own PMI readings exceeded expectations.
According to figures published by S&P Global, activity in the UK’s dominant services sector accelerated to a seven-month high in March. The index rose from 51 to 53.2, beating forecasts for a slight decline to 50.9.
While the strength of the services sector offered some reassurance about the UK’s economic outlook, analysts caution that overall growth remains fragile, with the first quarter of the year expected to see only marginal expansion of around 0.1%.
Looking ahead, the Pound Euro exchange rate may remain rangebound in the early part of the week as investors await UK Chancellor Rachel Reeves’s Spring Statement on Wednesday.
GBP traders anticipate that Reeves will announce a series of spending cuts aimed at restoring market confidence following the volatility in UK bond markets earlier this year. However, if the measures are perceived as a drag on economic growth, Sterling could face renewed pressure.
Meanwhile, the Euro could find support if Germany’s latest Ifo business climate index, due for release on Tuesday, shows a notable improvement in sentiment. Analysts hope that Germany’s increased investment in infrastructure and defence will lead to a more optimistic outlook, potentially lending strength to the single currency.
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TAGS: Pound Euro Forecasts
