The pound to euro exchange rate plunged to a near two-year low yesterday morning. GBP went on to consolidate just about the 22-month low but has not shown much improvement since. Sterling’s poor performance has been blamed on political uncertainty and worries over a no-deal Brexit. The pound is unlikely to rise much today, warned experts, as there is “little on the horizon to support it.”
Since Boris Johnson became Prime Minister and emphasised his determination that the UK will leave the EU on the deadline with or without a deal, Sterling has lost around 2.4 per cent of its value.
The pound has also been left under pressure as there is a chance that Johnson will call an early election.
The current Brexit uncertainty has caused Sterling to slump against a handful of currencies, including the US dollar, with GBP/USD plummeting to a 28-month low.
The pound is currently trading at 1.089 against the euro this morning, 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 consolidated just above 22-month lows against the common currency on Tuesday as political uncertainties and concerns over a no-deal Brexit continued to exert pressure on the pound,” said Brown.
“There appears to be little on the horizon to provide support to the pound, with continued rhetoric surrounding a no-deal Brexit resulting in the balance of risk remaining tilted to the downside.
“While today’s calendar sees no major releases from the UK, markets will digest GDP, CPI and unemployment figures from the eurozone.
“Economic growth is expected to soften to the slowest pace since late-2013, while the pace of price increases is also expected to remain benign.
“Lacklustre data may weaken the euro, providing some brief, immediate-term, relief for the pound, however the market’s broader focus will be on an expected Federal Reserve rate cut – the 1st rate reduction in more than a decade.”
So what does this mean for holidaymakers? The Post Office is currently offering a rate of €1.0663 for over £400 and €1.0717 for over £1,000.
Britons have been warned against paying on plastic while abroad to avoid being charged.
A third of families who took part in a recent Post Office Travel Money survey admitted they were caught out by extra charges averaging £120 on their last holiday.
As well as non-transaction charges which can be around 2.7 per cent on top of each transaction, one-in-ten holidaymakers also said they had also used ATMs regularly for cash withdrawals during their last holiday but did not realise that they would be charged a fee every time they did so.
Nick Boden, Head of Post Office Travel Money said: “Paying by debit or credit card may be convenient but holidaymakers are likely to incur fees and transaction charges without realising it until they see their bank statements.
“A safer route is to use a prepaid card like the Post Office Travel Money Card, which can be loaded with cash and won’t incur extra charges in shops and restaurants.”
Aside from the charges levied for paying on plastic, a range of other resort costs were regarded as rip-offs by the families surveyed.
In particular, the high cost of excursions and entry to attractions was another big budget-buster for families as was resort food and drink.