Pound Faces Growth Test as UK GDP Figures Loom

The Pound to Euro exchange rate has been under pressure in recent days due to weak UK economic data. The GBP/EUR pair is currently trading at €1.1664, down approximately 0.2% over the week.

Last week's data showed that UK manufacturing PMI was revised lower, signaling slower activity despite a ninth consecutive month of expansion. This disappointment weighed on Sterling, leading to losses against its stronger rivals.

The Euro, on the other hand, edged higher against some of its riskier peers on Monday despite disappointing Eurozone data, as a more cautious market mood provided support. The common currency then benefited from its inverse relationship with the US Dollar as the latter weakened.

Looking ahead, the Pound to Euro exchange rate may remain relatively subdued during the first half of the week amid a lack of significant UK and Eurozone economic releases. However, attention will turn to the UK's preliminary second-quarter GDP figures, which are expected to show economic growth slowing from 0.6% to 0.4%. A sharper-than-forecast slowdown could put renewed pressure on the Pound.