Pound hits four-month low against euro on diverging rate outlooks

Published 25/07/2025, 11:02
Pound hits four-month low against euro on diverging rate outlooks

Investing.com -- The pound fell to its weakest level against the euro in four months on Friday as British gilt yields declined on soft economic data, contrasting with higher European yields.

The euro climbed to 0.8717 pence, rising 0.22% and approaching its April 11 peak of 87.38 pence. If the euro breaks past that level, it would reach its highest point against the pound since late 2023.

Sterling also weakened against the dollar, dropping 0.4% to $1.3463.

The divergence comes as markets anticipate the European Central Bank has completed its interest rate cutting cycle, while British economic indicators have softened. British retail sales data released Friday showed June figures came in slightly below analysts’ expectations, though they did rebound from a sharp drop in May.

The April 11 peak that the euro is now approaching occurred during market volatility triggered by tariff concerns.

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