The pound to euro exchange rate has rocketed to new heights as optimism for a Conservative win in the December general election mounts. GBP surged to a six month high against the common currency as investors priced in the Tory majority. However, experts have cautioned that “uncertainty continues to linger” and risks still remain for sterling.
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The pound is currently trading at 1.1684 against the euro, according to Bloomberg at the time of writing.
Michael Brown, currency expert at Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures.
“Sterling ground out a fresh six-month high against the euro,” said Brown.
“It briefly broke above the €1.17 level, as investors began to price in a Conservative majority at the upcoming election.
“The risks for the pound, however, remain tilted to the downside, with four weeks to go until polling day and uncertainties continuing to linger.”
How is the pound likely to react after the election? “The upcoming general election spells further uncertainty for the pound as it remains vulnerable to fluctuations while the UK waits to find out exactly how the election will play out and who will be in charge at number ten,” said Ian Strafford-Taylor, CEO of international money specialist Equals.
“The political landscape naturally has a huge influence on the pound and its performance, so we can expect even more movement in the coming weeks as the UK braces itself for a general election.”
“Boris Johnson has already said that he wants the UK to leave the EU with his revised deal if the Conservatives win a general election.
“This means that we could see further turbulence for the pound as he would once again have to make a push to get his deal through parliament, a parliament that could look very different following the election.”
So what does this mean for Britons heading aboard and wanting to buy holiday money?
With the pound soaring against the euro, holidaymakers looking to buy euros should consider making the most of the favourable exchange rate.
The Post Office is currently offering a rate of €1.1243 for over £400 and €1.1465 for over £1,000.
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However, with sterling doing so well – is it best to see if GBP with improve further?
Rob Stross, CMO of WeSwap advised: “It goes without saying but when the pound is riding high, it’s a good time to buy your travel money.
“But sometimes it can be hard to know whether to stick or twist. What if the pound gets even stronger?
“We’d recommend doing some research, seeing when the pound was last this strong and keeping an eye on upcoming political events.
“Remember, the FX market likes stability. If you can’t bring yourself to exchange all your money at once, consider exchanging half your money now and half if the pound strengthens even more or starts to weaken.
“If you don’t want to miss out on future market highs, there are several rate alert systems you can use.”
Stross warned holidayers against doing one thing in particular when it comes to getting travel money.
“Above all, avoid buying your holiday money last minute,” the expert said. “Bureaux de change at the airport or train stations nearly always offer awful rates.
“Despite advertising 0 percent commission, they often mark up their exchange rate to include fees of anything up to 13 percent, knowing holidaymakers have no choice but to accept.”
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