- The pound has now surged against the euro after the initial drop last night following the failed Brexit vote
- Leading investment bank JP Morgan has said Brexit is now more unlikely to happen
- Later today, MPs will vote on whether Britain should leave the European Union without a Brexit deal in place.
The pound decreased against the euro last night when Prime Minister Theresa May’s Brexit deal was defeated in the common by 149 votes before bouncing back today. GBP first suffered after Geoffrey Cox’s legal advice on Theresa May’s withdrawal deal delivered a blow to the Prime Minister as he admitted the UK could be stuck abiding by EU laws. Sterling previously had soared after Mrs May said she had won “legally binding” assurances from the EU. The pound is currently trading at €1.161 against the euro, according to Bloomberg at the time of writing.
Pound to euro exchange rate: GBP drops after Brexit deal rejected by MPs
Laura Parsons, currency analyst at TorFX, spoke to Express.co.uk regarding the latest exchange rate figures. “The pound dropped on Tuesday as PM Theresa May once again failed to garner enough support to pass her Brexit deal,” she said.
“The rejection saw the GBP/EUR exchange rate drop back to €1.156. A no-deal Brexit is expected to be voted down later today, which would up the odds of an extension of Article 50 being sought. All the uncertainty is likely to keep the pound under pressure as the week progresses.”
Currency expert FairFX added: “Theresa May has failed once more to win the backing of MPs for her Brexit deal, meaning we’re still no closer to knowing exactly when and how Brexit will play out, if at all.
“With just 16 days to go until the UK is set to leave the EU, parliament are taking it down to the wire and the uncertainty surrounding Brexit continues to cause volatility for the pound.”
“In the aftermath of last night’s vote the pound dropped 1 per cent against the Euro compared to earlier in the day when it had gathered strength following optimistic deal talks.”
“This morning the pound is back up to 1.16 against the euro, however, it’s still down 11 per cent against the euro compared to the day of the referendum meaning holidaymakers would now get £119 worth of euros less for every £1,000 exchanged.”
“Nothing is certain but if the MPs vote in favour of a no-deal Brexit, we could see pound could fall across the board. In terms of what that looks for exchange rates, we could see the pound break below 1.10 against the euro, and head towards the low 1.20s against the US dollar. We’ve seen these sorts of rates a handful of time during the course of Brexit negotiations, but before that, we haven’t seen rates like that since 2009.”
“Uncertainty is one of the biggest causes of volatility for currency, and the lack of any concrete plans for Brexit is likely to cause the pound to react again, but in which way depends largely on tonight’s vote.”
Yesterday also saw the publication of the UK GDP figures for January which surged to 0.5 per cent against December’s -0.4 per cent. Economic data, however, has been generally overshadowed by the Brexit vote.
Holidaymakers need to be careful when it comes to buying travel money at this time of political uncertainty.
Greg Baggio, Head of FX at WeSwap, said: “WeSwap’s research has consistently found that nearly half of all Brits find and buy their foreign currency in the space of one day. This leaves them vulnerable to forces beyond their control that dictate the strength of the pound.
How to get the best exchange rate
Exchange rate: How to get the best deal on your holiday money.
How to get the best exchange rate
“With uncertainty still manipulating the value of currencies, in addition to political news causing unpredictable shifts, holidaymakers need to think strategically around timings for currency exchanges.
“If timed carefully, their swaps can work to their advantage. For holidaymakers, now may be a good time to buy your foreign currency before any other announcements have the opportunity to affect the current gains in the exchange rate.”
Brexit uncertainty could see travellers forking out almost 900 per cent extra for their medical care abroad, travel insurance experts have claimed.
In the case of a no deal scenario, the protection offered by the current European Health Insurance Card (EHIC) is unknown.
Yet it might offer no assurances at all, with Admiral Travel Insurance estimating treatment for food poisoning could cost £2,000 should a British traveller fall ill overseas, while a prescription for painkillers could see travellers forking out £150 – compared to less than £10 back home.
Meanwhile, for a more serious operation such as an appendix removal, this fee could surge by almost 900 per cent post March 29.
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