British Pound to Euro Forecast: GBP Retreats after Strong German Data

– Written by


David Woodsmith

STORY LINK British Pound to Euro Forecast: GBP Retreats after Strong German Data

The Pound Euro (GBP/EUR) exchange rate initially climbed on Tuesday before retreating quickly as stronger German data provided support for the single currency.

At the time of writing, GBP/EUR was trading at €1.1689, having slipped back from a one-week high of €1.1696.

The Pound (GBP) edged up at the beginning of Tuesday’s European trading session, although there was no obvious driver behind the move.

A modest improvement in risk appetite may have offered some support to the increasingly risk-sensitive currency.

However, with little economic data to provide direction, Sterling was unable to maintain its early gains.

Meanwhile, the Euro (EUR) recovered its earlier losses against the Pound after stronger-than-forecast economic data from Germany.

Germany’s latest IFO business climate index increased by more than expected in August, marking its fourth consecutive monthly improvement and reaching its strongest level in a year.

The signs of improvement in the Eurozone’s largest economy encouraged EUR investors, allowing the single currency to move higher.

The figures followed the release of Germany’s final GDP data earlier in the session, which showed that the economy slowed less sharply than initially estimated in the second quarter of 2026, with growth revised to 0.3% from 0.2%.

Near-Term GBP/EUR Forecast: Can CBI Data Give Sterling a Lift?

Looking ahead, the latest Confederation of British Industry (CBI) distributive trades survey is due for release on Wednesday. If the retail sales balance shows a modest improvement, it could lend some support to the Pound.

Meanwhile, the Euro may take direction from a speech by European Central Bank (ECB) policymaker Piero Cipollone. As one of the Governing Council’s more dovish members, his remarks could place the single currency under some pressure.

Developments in the US Dollar (USD) may also affect the Euro, given the strong negative correlation between the two currencies. If the ‘Greenback’ strengthens, the common currency could come under pressure.

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TAGS: Pound Euro Forecasts