Pound euro exchange rate enjoys ‘strong day’ after hitting levels not seen since May 2020

Pound euro exchange rate eases amidst Eurozone inflation low

Despite an uncertain year in the wake of the coronavirus pandemic and Brexit uncertainty, it seems sterling is finally getting back into its stride. Earlier this week, the pound to euro exchange rate hit a new nine-month high. Yesterday, the sterling enjoyed another “strong day” as it hit above that 1.14 handle.

Today, the pound is likely to remain on steady ground but could be “knocked” back depending on today’s comments from Bank of England’s Governor Bailey.

The pound is currently trading at 1.1432 against the euro, according to Bloomberg at the time of writing.

This is well above yesterday’s rate of 1.1320.

Michael Brown, Currency Expert at Caxton FX, spoke to Express.co.uk to provide exclusive insight into the current exchange rate.

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He said: “Sterling enjoyed a strong day yesterday, breaking above €1.14 for the first time since last May, as the Bank of England significantly dampened expectations that they would be taking Bank Rate into negative territory any time soon.

“We do, however, hear from BoE Governor Bailey again today, whose comments do have the potential to knock some of the wind out of sterling’s sails; though the core bullish GBPEUR trend remains firmly in place for now.”

George Vessey, Currency Strategist at Western Union Business Solutions said the appointment of Mario Draghi as Italy’s new Prime Minister will hopefully strengthen the nation’s economy and further strengthen the euro.

He said: “Mario Draghi, former European Central Bank (ECB) chief, has come out of retirement to take on his first political role in his career – to lead Italy’s government.

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“Mr Draghi managed to steer the Euro through the height of the continent’s sovereign debt crisis and now takes on another huge challenge.

“As well as other European countries, the pandemic has hit Italy extremely hard over the past twelve months.

“Hopes that Mr Draghi can help the save the Italian economy may also be a danger to his legacy if he fails, but optimism is ripe given he is credited with almost singlehandedly saving the Euro back in 2012.

“The euro itself staged a valiant recovery last year against the US Dollar, ending 2020 circa nine percent higher, but 2021 has started poorly.

“EUR/USD is nearly two percent lower year-to-date and is slowly closing on strong support levels.

“If the $1.20 level gives way soon, then $1.18 could come into play over the next few weeks and this could be the catalyst to drive GBP/EUR higher, perhaps towards $1.15.

“However, such a move would probably pressure GBP/USD under $1.35.”

So what does this mean for travel money?

Holidays abroad for leisure purposes are currently off limits for Britons.

Only holidaymakers with an essential purpose can travel abroad currently.

The Government website reads: “Under current UK COVID-19 restrictions, you must stay at home.

“You must not travel, including abroad, unless you have a legally permitted reason to do so. It is illegal to travel abroad for holidays and other leisure purposes.”

Post Office Travel is currently offering an online rate of €1.0910 over £400, €1.1069 for over £500, or €1.1125 for over £1,000.

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