Pound to Euro Treads Water as UK GDP Ahead

– Written by


Tim Boyer

STORY LINK Pound to Euro Treads Water as UK GDP Ahead

The Pound to Euro exchange rate (GBP/EUR) traded in a narrow range on Wednesday as investors adopted a cautious stance ahead of high-level discussions on the future of Greenland.

At the time of writing, GBP/EUR was hovering around €1.1539, having rebounded from an earlier overnight low, but continued to lack clear directional momentum as markets waited for fresh geopolitical signals.

The Euro (EUR) struggled to find traction on Wednesday as markets took a wait-and-see approach to developments surrounding Greenland.

With unease growing over US President Donald Trump’s renewed interest in the Arctic territory, representatives from Greenland and Denmark travelled to Washington for talks with US officials at the White House.

For EUR investors, the situation has heightened concerns about worsening relations between the US and Europe. Speculation that Trump could apply economic pressure – or even hint at military leverage – in pursuit of control over Greenland has added a fresh layer of geopolitical risk.

Against this tense backdrop, the Euro remained on the back foot as traders braced for any headlines emerging from the discussions.

The Pound (GBP) also lacked clear direction on Wednesday, with the absence of fresh UK economic data leaving Sterling without a strong catalyst.

A mild improvement in overall market sentiment offered the increasingly risk-sensitive Pound some limited support, particularly against safer currencies. However, the upbeat mood was not strong enough to generate a sustained move higher.

Markets were largely unmoved by dovish remarks from Bank of England (BoE) policymaker Alan Taylor. Given Taylor’s reputation as one of the most dovish members of the Monetary Policy Committee, his openness to further interest rate cuts failed to meaningfully alter expectations or sentiment around Sterling.

GBP/EUR Forecast: UK GDP in Focus

Looking ahead, developments linked to Greenland are likely to remain a key driver for the Euro during Thursday’s session. Any signs of de-escalation could help stabilise the single currency, while renewed hawkish rhetoric from the Trump administration may place EUR under further pressure.

For the Pound, attention finally turns to domestic data with the release of the UK’s latest GDP figures.

The economy is forecast to have grown by 0.1% in November. While this would still signal sluggish momentum, it would mark the first month of positive growth since June and could offer Sterling a modest lift.

However, a weaker-than-expected reading may drag on the Pound, particularly if uncertainty surrounding the autumn budget is seen to have weighed more heavily on economic activity than anticipated.

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TAGS: Pound Euro Forecasts