The pound is trading on a “Brexit Barometer” with the UK political scene impacting currency as trading opens this week, insist currency traders. Sterling saw a small rise as trading closed on Friday, giving a glimmer of hope for holidaymakers heading to the Eurozone. Previously, the currency has slumped to lows not seen since 2012, as negotiations over the UK’s departure from the European Union, scheduled for October 31, play out. The pound is currently trading at 1.096 against the euro, according to Bloomberg, at the time of writing.
Michael Brown, senior market analyst at Caxton FX, told Express.co.uk readers what to expert as the markets open for a new week.
He said: “Sterling struck a firmer tone on Friday, adding a shade over 0.5 per cent against the common currency, as rumours of a Labour-SNP coalition to attempt to avert a no-deal Brexit seemingly gathered pace.
“While there is still some way to go to Parliament definitively ruling out a no-deal exit, Friday’s move once again shows the pound trading as a Brexit barometer.
“However, the pound is not out of the woods yet, with political uncertainties set to continue to exert pressure and cap any rallies.
“This week’s economic calendar is devoid of any major releases from the UK, hence focus should remain on political developments.
“Meanwhile, in the Eurozone, while concerns over Italy continue to weigh, August’s flash PMI figures and minutes from the ECB’s July monetary policy meeting will be closely examined.”
With Brexit nor set to unfold until autumn, and uncertainty over the deal Prime Minister Boris Johnson may or may not secure, it appears the Brexit Barometer will remain.
Even so, following the UK’s departure, there is still set to be uncertainty.
Yet for Britons with summer holidays in the Eurozone still on the August agenda it appears a good time to switch their currency.
Previously, Rehan Ansari, Head of FX Risk Management and Derivatives at Caxton FX, spoke exclusively to Express.co.uk about the pound trading on a positive note.
He said: The rally would have been welcomed by market participants that have a requirement to buy Euro’s against the pound.”
Experts from Mybgagage.com, meanwhile, have urged holidaymakers to look outside of Europe to max out their currency – and beat the barometer.
They said: “If you’re planning a last-minute break and not tied to the idea of a typical holiday spots, then trying a more adventurous destination could allow you to exploit the pound’s strength.
“Brits heading to Turkey, Bulgaria, Tunisia, Argentina, Iceland and Malaysia will all get significantly more local currency in exchange for their pounds sterling, compared to this time last year.
“The cost of living is often lower beyond Brits’ favourite western European destinations too, which can further improve the value for money you get.”