The British pound extended its losses against the euro but steadied against the dollar on Thursday. This reflects ongoing market volatility and economic uncertainties. Sterling has been under pressure recently.
This is due to concerns over the UK’s economic outlook and the potential impacts of fiscal policies. While the pound has shown some stability against the dollar, it has continued to slide against the euro. Market analysts attribute the pound’s recent performance to a combination of factors.
These include subdued economic data and investor sentiment. The pound’s mixed performance indicates broader economic concerns and uncertainties in the UK,” said a financial analyst based in London. British Pound Sterling banknotes were seen in Vienna at the Money Service Austria company’s headquarters.
This imagery underscores the international interest and scrutiny of the UK’s currency.
Sterling’s mixed performance against the euro
From 2025 highs just above 1.2130 at the end of February, the Pound to Euro exchange rate (GBP/EUR) has retreated sharply to 5-week lows below 1.19.
This is amid a wider Euro surge in global markets. Previously, Rabobank had forecast that GBP/EUR would strengthen to 1.2270 at the end of 2025. This was amid Euro vulnerability.
But it has now adjusted its forecast to 1.2050. According to Rabobank, the dynamics of EUR/GBP have changed. This follows the German coalition proposal for a €500bn infrastructure fund and a sharp increase in defense spending.
Increased spending would underpin the German and Euro-Zone growth outlook. The bank has adjusted its predictions accordingly. The revised forecast reflects Rabobank’s assessment of stronger economic fundamentals within the Eurozone.
Substantial fiscal initiatives and increased investment in public infrastructure and defense drive this.
Photo by Toa Heftiba on Unsplash