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Stocks are higher, which makes for a stronger Pound into Euro conversion.
Pound Sterling is recovering against the Euro, helped by a rally in U.S. markets.
The Pound-to-Euro exchange rate (GBPEUR) has risen by a third of a per cent on the day to reach 1.1662, tracking a broad-based equity market rally that sees the U.S. S&P 500 index rally by more than a per cent.
The developments confirm that the fate of the exchange rate is tightly connected to global investor sentiment.
This suggests the Pound can extend gains against the Euro should the recovery in equities continue.
Above: GBP/EUR (top) closely tracks the U.S. S&P500 index.
The Euro has in 2025 staged a significant recovery against the Dollar amidst fears for the U.S. economy under Trump's presidency, which inflationary tariffs, domestic policy uncertainty and attacks on the independence of the Federal Reserve have dominated.
Although the GBP/USD has also risen on developments, EUR/USD is outpacing gains in GBP/USD, meaning GBP/EUR must automatically fall.
However, EUR/USD has reached overbought conditions of late, and some payback is likely, which can assist GBP/EUR.
"EURUSD looks to be settling into a short-lived period of consolidation following its impressive rally from its early February lows. Momentum signals are bullish and overbought," says Shaun Osborne, Chief FX Strategist at Scotiabank.
Osborne adds that "the EUR’s modest weakness is likely just a pause following its impressive rally from recent lows just above parity.
Others also warn it is too early to call a turn in fortunes for markets.
"U.S. policy uncertainty remains a central theme for FX markets," says Clyde Wardle, Senior EM FX Strategist at HSBC.
GBP/EUR fell to a low of 1.1446 on April 11 before recovering to 1.1726 two days later. The low and high now mark technical boundaries that could inform trade over the coming days.