The pound to euro exchange rate experienced “little in the way of volatility” last week, experts have said. This was due to holiday trading conditions after the festive break. However, politics and Brexit will once again serve as a barometer for GBP this week as normal trading condition resume.
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The focus for the week will be on the Brexit Withdrawal Agreement Bill and EU trade talks.
Experts have predicted the pound will remain “headline-driven.”
The pound is currently trading at 1.1721 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 traded largely unchanged against the common currency on Friday, as the last day of holiday trading conditions brought with it little in the way of volatility,” said Brown.
“This week, as the first full trading week of 2020 gets underway, politics is likely to return to the forefront of investors’ minds.
“The Brexit Withdrawal Agreement Bill – which legally implements the Brexit deal – is set to complete its Commons stages this week, while EU Commission President von der Leyen will also be in London for preliminary trade talks.
“Sterling, therefore, is set to remain headline-driven.”
Hamish Muress, Senior Currency Strategist at OFX, has also shared his predictions for the pound for 2020.
“Any talk of the UK reaching a cliff edge scenario as we approach the December 2020 deadline for a trade deal with the European Union will have a negative impact for sterling,” he said.
Muress continued: “Despite a No Deal Brexit being ruled out last year by the previous Parliament, we could still be faced with a no-deal scenario if a trade agreement hasn’t been reached by the end of year deadline.
“To this tune, trade talk rhetoric between Britain and the European Union will play a large part in the performance of sterling throughout the year and any commentary from Brussels will be a particular focus.
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“Similarly, the EU summit in June could turn out to be a significant date in trade discussions as it could see an agreement to grant and extension to the current transition period.
“Finally, it will be interesting to keep a close eye on the actions of new Bank of England governor, Andrew Bailey, when he starts his new role in March.
“Although the extent of the change we might see is to be confirmed as Bailey has been working around Threadneedle Street for years so may well be a continuity candidate for current governor, Mark Carney.”
So what does all this mean for Britons heading off on holiday to escape the January blues and hoping to get travel money?
The Post Office is currently offering an exchange rate of €1.1300 for over £400 and €1.1523 for over £1,000.
According to ABTA research, seven in ten people are planning a trip abroad this year.
Sainsbury’s Bank Travel Insurance data has shown UK adults will spend an average of £757 each per getaway.
Cruises are the most expensive type of holiday with these holidaymakers planning to spend an average of £1,650 each.
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