Pound to euro exchange rate: GBP claws back strength after a week of dramatic losses

The pound has made a modest recovery against the euro after a week of dramatic losses last week. However, as Brexit concerns continue to mount, it is likely the UK’s departure from the EU will lead the way for the exchange rate.

The pound is currently trading at a rate of 1.0813 against the euro according to Bloomberg at the time of writing.

Though it is a small gain, sterling still sits below the 1.1 handle.

Speaking exclusively to Express.co.uk, Michael Brown, currency expert at Caxton FX, shared his insight.

“Sterling found a bit of light relief on Monday, notching its first daily gain in six against the euro, as the pressure stemming from ongoing Brexit uncertainties relented a touch,” he explained.

“Said post-Brexit talks will remain the primary driver of the pound today, with this morning’s labour market figures somewhat inconsequential, and the path of least resistance remaining to the downside for sterling pairs.”

The small growth is a welcome relief after last week, with the GBP hitting its lowest level since March by Friday.

It came as ministers continued to battle it out to try and secure a Brexit deal.

However, with the UK and EU still and loggerheads over some trade negotiations, rising concerns over a “no-deal” Brexit hit the exchange rate with force.

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“The EU has warned that it will take legal action unless the UK scraps its plan to override the Brexit divorce treaty,” George Vessey, UK currency strategist for Western Union Business Solutions told Express.co.uk.

“UK PM Boris Johnson refused to do so yesterday, and sterling suffered its worst day versus the Euro since the intense market crash experienced in March.”

He continued: “Will either side back down or will four years of Brexit negotiations be thrown out the window?

“EU leaders appear to have been handed an ultimatum to either accept the treaty breach or brace for a disorderly divorce that could hamper economic recovery hopes by further disrupting supply chains and rattling financial markets.”

The ongoing impact of the coronavirus pandemic is also playing a crucial part in determining the actions of traders.

“Although all sectors grew in July, and the UK is making a valiant effort to emerge from its sharpest recession on record, analysts warn that a return to pre-pandemic levels could be a long way off,” added Mr Vessey.

“Clouds hang over recovery prospects including the risk of mass job losses once the government’s wage support scheme ends next month, rising COVID-19 infections as we head into the colder months and ongoing Brexit-related uncertainty.”

With more turbulence likely ahead what does this mean for holidaymakers looking to exchange money in the coming weeks?

According to experts, staying up-to-date on relevant government developments is the way to go.

Ian Strafford-Taylor, CEO of travel money specialist FairFX, added: “Whether you’re paying by paper or by plastic, the best thing you can do is to plan ahead.”

Travel money providers often offer varying rates, which means shopping around could be the key to getting the most bang for your buck.

The Post Office Travel Money is currently offering a rate of €1.0427 for amounts of £400 or more, and €1.0633 for amounts of £1,000 or more.

With further exchange rate fluctuations ahead, Britons are advised to lock in the best rates when they uncover them.

“With Coronavirus and a looming Brexit deadline, there is a lot of uncertainty ahead, which means the pound is vulnerable to further fluctuations,” advised Mr Strafford-Taylor.

“Using a prepaid card gives you more control over exchange rates, whether you’re topping up before you travel or while you’re away, protecting you from unstable markets and further fluctuations.”

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