– Written by
Ben Hughes
STORY LINK Pound to Euro Steady Ahead of UK Jobs, PMIs
The Pound-to-Euro exchange rate (GBP/EUR) drifted lower at the start of the week as investors adopted a cautious stance ahead of several potentially market-moving data releases.
At the time of writing, GBP/EUR was hovering around €1.1391, little changed from Monday’s opening levels.
The Pound (GBP) struggled to find direction on Monday, with traders reluctant to commit ahead of a busy run of UK economic data and an expected interest rate cut from the Bank of England (BoE).
Over the coming days, the UK is set to release fresh labour market figures, inflation data, PMI surveys and retail sales numbers. Together, these releases should offer clearer insight into how the economy performed in the final quarter of 2025.
Even so, Sterling’s dominant driver is likely to be the BoE’s policy decision. While a rate cut is already fully priced in, any guidance pointing toward a further 50bps of easing next year could weigh on confidence in the Pound.
The Euro (EUR) also traded within a narrow range on Monday as markets looked ahead to the European Central Bank’s upcoming policy meeting and the final European Council summit of the year.
Although the ECB is widely expected to keep rates unchanged, the single currency could benefit if policymakers clearly signal that the easing cycle has run its course.
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Beyond monetary policy, attention may turn to discussions among EU leaders — particularly proposals to grant Ukraine access to Russian assets frozen in Belgium. For EUR investors, progress on this front would be seen as a test of the bloc’s political unity and decision-making strength.
GBP/EUR Forecast: UK Jobs Data to Weigh on Sterling?
Looking ahead, the Pound to Euro exchange rate could face headwinds on Tuesday following the release of the UK’s latest employment report.
October’s figures are expected to show unemployment edging higher alongside softer wage growth. Evidence of cooling labour market conditions would likely reinforce expectations for additional BoE rate cuts in 2026, pressuring Sterling.
UK PMI data will also be in focus. An improvement in December’s preliminary services PMI could help limit downside pressure on the Pound.
For the Euro, upcoming Eurozone PMI releases may lend support if they confirm resilience in private sector activity. This will be followed by Germany’s ZEW economic sentiment index, which is forecast to show improved confidence and could provide an additional lift to the single currency.
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TAGS: Pound Euro Forecasts
