GBP/EUR exchange rate week review: pound falls against euro amid tariff turmoil
07/04/2025 to 11/04/2025: The pound euro exchange rate dipped by more than 2.5% - its biggest weekly loss since September 2022.
Monday
The pound euro (GBP/EUR) exchange rate started the week on the back foot amid UK-US tariff turmoil, causing it to slide into the 1.16 mid-range. Despite holding out for exemptions to Donald Trump’s tariffs, speculation grew that the UK may implement retaliatory measures, fuelling fears that the trade conflict will escalate.
The safer euro drew support from a risk-off mood as persistent global uncertainty took hold of markets. A rebound in Eurozone retail sales also bolstered the single currency, despite falling short of forecasts.
Tuesday
The pound euro rate was rangebound amid a lack of economic data from either side.
The increasingly risk-sensitive pound made marginal gains against the safer euro as a risk-on market mood dampened the single currency’s appeal. Further support for the pound was prevented by dashed hopes of a UK-US trade deal.
Wednesday
The pound slid into the 1.15 mid-range versus the euro after surging yields on 30-year gilts generated unease surrounding the UK’s debt markets. This cast further doubt on the government’s ability to balance economic growth with strict fiscal discipline.
Reduced demand for the dollar and improving sentiment in German politics helped the euro to firm. Germany’s CDU and SPD parties struck a deal to form a coalition, raising hopes for political stability and economic reforms in the euro area’s largest economy.
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Thursday
The pound experienced uncertain trade as a UK data lull left the currency exposed to wider market trends.
The euro was buoyed by hopes that the EU might secure a trade deal with the US after Donald Trump announced a 90-day tariff delay. Moreover, the single currency profited from its strong negative trading relationship with the dollar, which suffered deep losses.
Friday
The pound euro rate briefly dipped below the 1.15 benchmark after ongoing dollar weakness supported the single currency following Donald Trump’s U-turn on his global tariffs.
The UK currency’s fall was cushioned by GDP figures for February, which showed the domestic economy grew by a faster-than-expected 0.5%, outstripping forecasts for 0.1% growth. January’s modest fall of 0.1% was revised up to zero growth.
The pound euro rate ended the week at around 1.151.
Looking ahead
The UK consumer price index for March hits the headlines on Wednesday. If UK inflation cools by 0.1% to 3.4% as forecasted, investors will likely ramp up rate cut bets, denting the pound.
Investors will also monitor the progress of trade deal negotiations between the US and officials in the UK and EU.