The pound to euro exchange rate showed a decline for the sixth week in a row last week. GBP slid on Friday and has shown no signs of improvement this morning. Political uncertainty is to blame for the poor state of the UK’s currency. The Conservative Party will select its final two candidates for the new Prime Minister this week which will influence sterling’s movements.
The pound is currently trading at €1.123 against the euro, according to Bloomberg at the time of writing.
Michael Brown, currency expert at Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures.
“Sterling declined modestly against the euro on Friday, with the pound chalking up its sixth consecutive weekly loss against the single currency,” said Brown.
“Sterling weakened largely due to political uncertainties continuing to dampen demand, with no major data releases from either side of the pairing.
“Turning to the week ahead, sterling is likely to continue being driven by ongoing political developments, with the Conservative Party due to select the final two candidates being put to a membership ballot by the end of the week.
“Also in focus for the pound will be Thursday’s Bank of England rate decision, where policymakers may strike a relatively hawkish tone despite being expected to keep rates on hold.
“For the euro, this week’s CPI and PMI releases will be eyed as the euro area continues to recover slowly from a 1st quarter slowdown.”
So how will this affect holidaymakers jetting off abroad to Europe? The Post Office is currently offing a rate of €1.0986 for over £400 and €1.1036 for over £1,000.
Travellers are being urged to be careful when it comes to exchanging euros back into pounds at the end of a trip.
An expert said the “risk” over currency related to the Brexit departure date – which is not set in stone – and has already shifted from March.
Paul Brewer, founder of Currency Online Group, told Express.co.uk: “Brexit could happen before the October 31 deadline so waiting until then to exchange euros back to pounds risks leaving you out of pocket with a currency that is worth less than before the referendum.
“You might not be able to get as maximum value as possible doing it this way, but you can sleep easy by knowing that you won’t have lost out heavily.”
He added: “If you’ve bought your currency and then the rate strengthens significantly before you go away you might be kicking yourself, especially if you have exchanged a significant amount.
Concern over how Brexit will affect holidays has seen a 20 per cent plunge in euro currency transactions.
The figures, recorded by the International Currency Exchange between May 2018 and May 2019, show a fifth fewer Britons purchased Euros this year.
Louis Bridger, Head of ICE currency said: “These figures could indicate that Brits might be avoiding travelling within the Eurozone altogether – looking at alternative destinations or even opting for ‘staycations’ within the UK – most likely due to the fluctuating strength of the pound.”