The pound to euro exchange rate continued to trade in a “tight range” amid growing concerns about a new surge in COVID-19 across Europe. Though Britons have been given the go-ahead to travel between certain destinations without the need for quarantine, following a sudden rise in Spain, the Foreign and Commonwealth Office (FCO) have proven how quickly travel corridors can be shut.
Though many Britons may be gearing up to purchase travel money ahead of holidays, they may be concerned about the fluctuations sterling has seen in recent weeks.
The pound is currently trading at a rate of 1.1019 according to Bloomberg at the time of writing.
Speaking exclusively to Express.co.uk, Michael Brown, currency expert at Caxton FX explained his take on the current rates.
He said: “Sterling traded within a tight range against the common currency yesterday, with the market’s attention firmly on the Federal Open Market Committee decision, leaving GBPEUR to meander along of its own accord.
“Today may be a similarly quiet one for the pair, with no notable data releases from either side of the Channel; though the worrying rise in COVID-19 cases across Europe will continue to be monitored, and may temper some of the recent optimism towards the common currency.”
Prime Minister Boris Johnson has already cited concerns for a second wave hitting Europe, adding that he will not hesitate to shut current travel corridors if it is deemed necessary.
Speaking on Tuesday, he warned: “I’m afraid you are starting to see in some places the signs of a second wave of the pandemic.”
However, despite how prominent the pandemic is, it seems it is not the only thing playing a major role in the exchange rate.
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“The British Pound found comfort in some optimistic views about a UK-EU trade deal being secured this year,” pointed out George Vessey, UK currency strategist for Western Union Business Solutions.
“Charles Grant, the director of the Centre for European Reform, remains confident that a deal will be made despite the current gloomy outlook portrayed by both sides.
“Better-than-expected retail sales data from CBI also helped support sterling’s uplift.”
He added: “GBP/EUR also clawed its way back above the €1.10 handle having been pressured lower by the strong Euro following the EU’s historic coronavirus rescue fund agreed last week.
“Although the pound has scope to climb higher, traders remain wary of virus-related growth concerns in the UK, the threat of another wave of infections halting the economic recovery and the lingering UK-EU trade talks that remain deadlocked.”
Britons with holiday plans in the coming weeks should stay up to date on relevant news and political changes.
Though undoubtedly they will need to do this to remain in the know about the status of travel corridors, any changes could also impact the direction in which the rates move.
“With so much change in the world right now, it’s hard to predict when exchange rates will be at their best,” said Karen Gee, business development director for foreign currency provider Spendology told Express.co.uk.
“There’s unprecedented volatility in the markets.
“So for someone who likes to get involved and do the research you can track the market yourself, wait until exchange rates increase and buy your currency when you judge it’s the best time bearing in mind your departure date.”
The good news is, there are a lot more travel money providers to choose from, with the majority of stores reopening their doors since lockdown.
The Post Office Travel Money is currently offering 1.0614 for amounts of £400 or more and 1.0823 for amounts of £1,000 or more.
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