Forecast & analysis
1st September 2025
Trend bias:
Sideways, consolidating within a tight range
Factors in price action:
- GBP on the backfoot on continued concerns about brewing stagflation in the economy as well as fiscal concerns that could arise in the upcoming Autumn Budget
- EUR weighed on with political risks in France
This week:
EU CPI on Tuesday
Key risks ahead:
- Likely to see a bigger reaction on the EUR should the EU CPI numbers undershoot and thus raising the prospect of further rate cuts by the ECB this year – EUR weakness if this is the case
26th August 2025
Trend bias:
Range-bound with mild GBP upside after last week’s CPI, but EUR resilience limiting further gains.
Factors in price action:
Sterling benefitted from hotter UK inflation, narrowing the perceived policy gap with the ECB. EUR has also found support from softer USD and risk sentiment, leaving cross choppy.
This week:
- Eurozone: Ifo, ECB minutes provide policy tone and French and German CPI
Key risks:
- Weak UK data could reverse post-CPI GBP gains.
- If ECB minutes and CPI numbers has a dovish stance then EUR could soften, lifting the cross.
19th August 2025
Trend bias:
Rangebound with slight downside risk as sterling momentum softens.
Factors in price action:
Sterling has held firm, but momentum is slowing as markets weigh the UK inflation outlook and the BOE’s cautious stance. Eurozone data remains soft, but the euro is finding some support as rate-cut expectations moderate. The pair sits close to support levels, keeping risks skewed to the downside if sterling underperforms.
This week:
- UK: July CPI (Wed), Retail Sales (Fri), Flash PMIs (Thu).
- Euro Area: Flash PMIs (Thu), Q2 negotiated wages (Fri).
Key risks ahead:
- Upside UK inflation surprise could lift sterling.
- Weak UK data or euro stabilization risks breaking below the first level of support.
12th August 2025
Trend bias
GBPEUR remains rangebound, but the balance of risks is tilted to the downside for sterling.
Factors in price action:
Last week’s UK GDP beat gave the pound a short-term lift, but the bigger picture still points to a stagnating economy, cautious consumer sentiment, and uncertainty ahead of the autumn budget — all of which could limit upside potential.
On the euro side, positioning remains constructive, with EUR still the preferred vehicle for USD bearish bets. While eurozone data has been mixed, steady ECB guidance is providing a stable backdrop. GBPEUR has bounced around 2% from year-to-date lows following the BoE’s ‘hawkish cut’ and market repricing of UK rate expectations, but fundamental headwinds for GBP remain.
This week:
- UK data calendar is light; sterling will take cues from broader risk sentiment.
- Eurozone flash PMIs on Thursday are the key macro driver — softer numbers could weigh on EUR, but the bar for disappointment is relatively high.

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