Pound to euro exchange rate ‘volatile’ as sterling plummets amid Brexit uncertainty

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The pound to euro exchange rate slipped on Thursday as the trading week drew to a close. It fell dramatically following the Bank of England’s “increased speculation about negative rates,” said experts. However, GBP managed to make a recovery after the prospect of a Brexit trade deal looked more likely.

The UK’s departure from the European Union will continue to impact sterling moving forwards.

The pound is currently trading at 1.0934 against the euro, according to Bloomberg at the time of writing.

Michael Brown, currency expert at international payments and foreign exchange firm Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures this morning.

“Sterling had a volatile day against the euro yesterday,” said Brown.

“It slipped almost a big figure from the highs after the BoE further increased speculation about negative rates, before recovering most of the lost ground after EU Commission President von der Leyen was said to be ‘convinced’ that a UK-EU trade deal can be agreed.

“Looking ahead, those Brexit headlines are likely to remain the primary factor driving the pound into the weekend.

“Though any downside for sterling may now be amplified as a result of sub-zero rate pricing.”

George Vessey, Currency Strategist at Western Union, also commented on the Brexit developments.

“On Wednesday, UK Prime Minister Boris Johnson backed down slightly from his fight with Conservative rebels over Brexit and his internal market bill, which would break international law,” he said.

“The pound has been rattled by the recent Brexit developments as no-deal fears have resurfaced, prompting GBP to fall.

“Although the bill passed its first hurdle in Parliament on Monday, Mr Johnson offered a significant concession to rebel Conservative MPs on Wednesday, agreeing that the House of Commons must approve controversial powers allowing the government to override the Brexit withdrawal treaty.

“The move comes to try and head off another Tory rebellion next week when the bill is examined in more detail and amendments are put forward.

“Nevertheless, the bill still needs to pass through the House of Lords and the EU continues to warn of legal action since the bill breaches international law, regardless of whether Mr Johnson or MPs activate it.

“Sterling remains vulnerable amid increased no-deal Brexit risks.

“If a deal is not secured before the October 15 EU summit, then the probability of trading on World Trade Organisation terms in 2021 will likely ramp up.

“GBP/USD could fall back under $1.20 and GBP/EUR towards parity in such a scenario.”

So what does this all mean for your holidays and travel money?

The Post Office is currently offering a rate of €1.0531 for over £400, €1.0685 for over £500 or €1.0740 for over £1,000.

Travellers should always look to monitor the exchange rate and buy when the rate if favourable or they risk losing money.

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