Boris Johnson announces new national lockdown
The pound to euro exchange rate “lost ground” as the first full week of 2021 began, said experts. The announcement of yet another lockdown saw the market react “poorly”. The FTSE is now set to decline with the lockdown to last at least seven weeks.
A “double-dip” recession is anticipated before post-covid recovery can happen.
What’s more, this will now be the “significant driver” for GBP now Brexit is finally completed.
The pound is currently trading at 1.1088 against the euro, according to Bloomberg at the time of writing.
Michael Brown, currency expert at international payments and foreign exchange firm Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures this morning.
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“Sterling lost ground against the euro yesterday as the market reacted poorly to the prospect of a third national lockdown in England,” said Brown.
“It began to expect a ‘double-dip’ recession before any recovery from the pandemic takes hold.
“With Brexit now out of the way, the economic backdrop will be a more significant driver of the pound both today and in the coming months.”
So what does all this mean for your holidays and travel money?
Post Office Travel is currently offering a rate of €1.0679 over £400, €1.0835 for over £500, or €1.0891 for over £1,000.
Holidays have already been cancelled in droves over the past year and this new lockdown will likely see more getaways axed.
This will not be a time to buy holiday money for most people.
However, it could be a savvy time to exchange any leftover foreign currency you have.
“Typically, travellers tend to hold on to their remaining foreign currency, as it generally isn’t worth converting smaller sums of money due to poor exchange rates,” founder of currency exchange platform Bidwedge, Shon Alam, said.
“We all do it – get home from a trip and chuck our change in the drawer ready to use for next time, but by the time next time comes around, we always forget about it,” he said.
“According to ABTA in a 2018 report, Brits each took 1.6 holidays abroad, so, in reality, we actually only go overseas around once a year on average. So don’t waste it – change it!
“If you are a regular traveller – for example if you travel monthly or for business – then I would keep currency that you are likely to use again if there are particular locations you travel to regularly.
“However, any longer than that, and I would turn it back into my home currency.”
If you decide to change the money back into sterling, the first step you should take is to check the bank rate.
“This is the rate that the banks sell to each other,” said Alam. “At Bidwedge, we buy back at the bank rate and charge a small fee, sticking to our transparency policy to help give customers the best value for money.
One major red flag to look out for is if a currency seller tells you they are receiving zero percent commission.
“When you come back from your holiday and want to exchange leftover cash into your home currency, start at the bank rate and then ask what the vendor is buying it back for,” the expert advised.
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