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The pound to euro exchange rate has suffered major fluctuations in recent months amid the fallout of the first coronavirus lockdown and the ongoing Brexit negotiations. Despite this, in the last few days, sterling has managed to claw back some strength.
Following on from its first gain in five days, the GBP yesterday saw another small boost against the common currency.
The pound is currently trading at a rate of 1.0936 against the euro according to Bloomberg at the time of writing.
Speaking exclusively to Express.co.uk, Michael Brown, currency expert at Caxton FX shared his insight into the current rates.
“Sterling notched a very modest daily gain against the euro yesterday, its second in succession, rising to 1-week highs against the common currency, as the pound received a small tailwind from the modest improvement in risk appetite,” he said.
“Looking ahead, today’s data docket is devoid of anything interesting, ensuring that attention will remain on the latest headlines, especially surrounding the post-Brexit trade negotiations.”
The pounds modest gain comes following Rishi Sunak’s latest scheme to attempt to float the economy through a “second wave” of coronavirus.
However, experts suggest the move was not enough to fully secure sterling’s position.
Jeremy Thomson-Cook, chief economist at Equals Money said: “Unfortunately, Chancellor Sunak’s latest scheme does not eliminate the risk of an increase in unemployment once the furlough scheme ends.
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“The latest plan supports ‘viable’ jobs and helps employees in industries that have been able to restart to some extent and leaves behind those industries that are still completely shuttered like theatres for example.”
He added: “Sterling has paid little attention to the Chancellor’s address, it’s almost like there is another cliff-edge that sterling traders have decided to focus on.”
Though the threat of a second coronavirus lockdown is certainly causing some trepidation among traders, at the moment Brexit trade negotiations remain in the spotlight.
In recent weeks the UK and EU have clashed on deals which must be ratified before December 31.
As of January 1 the UK will have left the EU.
If adequate deals are not struck, this could be detrimental for the pound, as has been the case in the past.
The promise of a deal being agreed upon has helped the GBP gain strength against the euro.
However, the threat of a “no-deal Brexit” has seen the exchange rate plummet.
“Weak UK growth is weighing on the pound’s attractiveness and pandemic-induced pressures combined with Brexit-related uncertainty could send sterling tumbling even lower over the coming months,” warned George Vessey, UK currency strategist, Western Union Business Solutions.
With many Britons still gearing up for travel, these political developments could be concerning when it comes to purchasing money for their holiday.
Luckily, there are ways travellers can get the most bang for their buck even in the midst of the chaos.
Rob Stross, CMO of peer-to-peer currency exchange platform WeSwap offered one method of changing travel money which could lessen the impact of sudden exchange rate dips.
He said: “When it comes to travel money, with the peaks and troughs of the pound in light of Brexit, it’s difficult to plan when to buy your travel money.
“We’ve also done research that shows nearly half of Brits buy all their travel money in one sitting.
“It can be wise, however, to exchange half your holiday money now and half closer to when you go or if the pound strengthens.”
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