Holiday money should be purchased today ahead of Boris Johnson ascending to the top role of Prime Minister. Experts have warned that the pound to euro exchange rate could come crashing down if Johnson comes to power. Markets have remained cautious ahead of the announcement, due at 11.45am this morning. Britons hoping to make the most of the exchange rate before it plummets are advised to buy their euros now.
Michael Brown, a senior currency analyst at Caxton FX, has said if the new Prime Minister’s Brexit plan moves towards no deal, this is “likely to weaken the pound”.
The pound is currently trading at €1.113 against the euro, according to Bloomberg at the time of writing.
Since Britain voted to leave the EU the pound has fallen by 14 per cent against the euro.
Brown told Express.co.uk: “Markets will be focusing on the new Prime Minister’s Brexit plan, with any moves towards a no deal exit likely to weaken the pound.”
He added: “The likely result, a Boris Johnson victory, seems to be priced into the pound, hence focus will quickly switch to both Cabinet appointments and the plan for Brexit.
“However, should Jeremy Hunt pull off an unlikely victory, sterling would likely move to the upside.
“Either way, political uncertainties show no sign of dissipating, making significant sterling appreciation unlikely.”
Brown advised: “With all this uncertainty, holidaymakers can hedge their bets and protect themselves from the on-going currency volatility against the Pound by exchanging half their currency now, half later. That way, whether the rate goes up or down, they can benefit from a higher exchange rate on at least half the amount.”
The latest poll by YouGov, carried out between July 1 and 5, showed 74 per cent of 1,119 Conservative Party members who were polled wanted the former Foreign Secretary to triumph.
Both Hunt and Johnson want to renegotiate a new deal with the EU, so they can ditch parts of the deal Mrs May struck with Brussels last year.
As part of his Brexit plan, Johnson has said the £39 billion Brexit ‘bill’ must be suspended “in a state of creative ambiguity over the talks” while a Free Trade Agreement is negotiated.
He added he will pay upfront for a “standstill” transition period after the day of leaving if the EU is willing to agree to this.
Johnson also wants separate agreements on issues including EU civil servants’ pensions, as well as the settlement of court cases still live at the point of Brexit and address the questions posed by Gibraltar and the management of UK bases in Cyprus on a bilateral basis.
He also proposes that the Irish backstop be “kicked out” so that the issue of the Irish border and “indeed every other border” is instead settled “where those questions logically belong in the context of the Free Trade Agreement”.
Alana Parsons from international payments and foreign exchange firm Caxton shared her advice for holidaymakers: “Getting the most value for your travel money can be tricky, but not if we spend as much time planning our finances as we do researching our holiday destinations,” she said.
“There’s a lot of uncertainty right now because of Brexit and global events impacting the forex market. However, there are a number of ways travellers can protect themselves to get more foreign exchange for their pounds.
“Build up a travel money fund and lock in an exchange rate for your next trip on a currency card, keep a watchful eye on the rates so you can take advantage of any gains, and most importantly don’t leave it all to the last minute and avoid airport kiosks!”
Louis Bridger, Head of UK at ICE, added: “We have always encouraged people to plan ahead to get competitive rates of their travel money, but it’s clear that the current climate is driving more holidaymakers to get savvier in a bid to get the best deal.
“The increase in popularity for click and collect service demonstrates that people are putting more thought into buying their currency, and not just leaving it to the last minute where rates are generally less competitive. Even though the weak pound is making it more expensive for Brits travelling abroad, a little planning goes a long way and can save customers a healthy chunk on their travel money.”