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The pound to euro exchange rate has “hardly moved” despite a week of volatility in the markets. The US general election has swept the world up in its grasp, as the votes are slowly counted.
Yet the full extent of its impact on the GBP won’t be known until the official winner is named.
Brexit trade talks have also played a key role in deciding the exchange rate in recent weeks.
Yet, with these talks on hold temporarily, traders may be shifting their attention to the economic impact a second draconian lockdown will have on the UK.
The Bank of England is due to make its QE programme announcement today, with suggestions it may further lower interest rates on loans.
Despite this, the full extend of the lockdown measures on the UK are yet to be seen.
The pound is currently trading at a rate of 1.1089 against the euro according to Bloomberg at the time of writing.
Michael Brown, currency expert at Caxton FX, spoke to Express.co.uk and shared his exclusive insight into the current exchange rate.
“Despite all the uncertainty and volatility of the last few days, caused by the presidential election, sterling-euro has hardly moved, with the market still awaiting fresh impetus from the conclusion of post-Brexit trade talks, which have now been paused until next week,” he said.
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“This morning, however, the Bank of England may shake things up a little, with the Bank set to announce an increase of at least £100bn to their QE programme, providing further support to the ailing UK economy.”
Jeremy Thomson Cook, Chief Economist at Equals (part of the Equals Group) added: “The Bank of England has increased its quantitative easing plan this morning, adding support through 2021 and acknowledging that the double whammy of COVID-19 and Brexit means the UK economy is in for an “unusually uncertain” time.
“The note from the Monetary Policy Committee states that it ‘stands ready to take whatever additional action is necessary to achieve its remit’; with inflation drastically underperforming the Bank’s two percent target, then the possibility of negative interest rates in the UK cannot be completely ruled out.
“Particularly if the Bank’s assessment that the UK leaves the EU with a free trade agreement proves to be false.”
With these changes in mind, it is likely sterling could see further fluctuations this week, with even more in store once post-Brexit trade talks resume.
Despite this, many Britons may be left with unwanted travel money they are keen to switch back into pounds.
One travel expert has warned holidaymakers could end up losing out if they decide not to switch their unwanted currency back into pounds.
“Since lockdown began, cancelled holidays have meant that people are currently sitting with hundreds, if not thousands, in unused and unwanted currency,” said Paul Brewer, CEO of Currency Online Group.
“Many people decide to keep it in anticipation of a future trip; however this is not sensible.”
With the future of travel uncertain, Mr Brewer points out many holidaymakers may simply forget their currency after a while.
“Sometimes they’ll think ‘I’ll use it next time’ but you’d be surprised how many people just simply forget it’s there after a while.”
Mr Brewer warned: “Even if you do plan to use it the future, the changing exchange rate means you could be losing out if the value of the currency falls dramatically.
“Political and unforeseen events like Brexit and COVID-19 mean that the value of a currency can change quickly.”
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