Pound to euro exchange rate: GBP could see boost amid political ‘headwind’ in Europe

The pound is on precarious ground against the euro, as trading opens today. Sterling is attempting to recover lost ground against the currency, which hit as the markets closed on Friday. Yet one key factor in Italy could prove to weaken the euro, therefore strengthening sterling and getting a better rate for holidaymakers. The pound is currently trading at 1.100, against the euro, according to Bloomberg at the time of writing.

Michael Brown, currency analyst at Caxton FX, told how implications in Europe could affect the rate today.

He told Express.co.uk: “Sterling lost ground against the euro on Friday, shedding around 0.5 per cent, as markets struck a risk averse tone with concerns over the escalating US-China trade war and a potential no-deal Brexit resulting in little demand for sterling and market participants seeking a safe-haven.

“On Bank Holiday Monday, sterling was little changed.

“Turning to today, the economic data calendar is relatively quiet, hence focus will be on political developments.

“While Brexit headlines will remain the primary driver of the pound, focus for the euro will be on developments in Italy, with today’s deadline for the formation of a new government looming.

“Failure to form a fresh government would result in elections, a potential headwind for the common currency.”

This means potential trouble for the euro, and a consequent upturn in the fortune of sterling.

Express.co.uk previously reported how Brexit, meanwhile, is acting as a “barometer” moderating the pound to euro exchange rate.

He said: “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.

The rate has been fluctuating throughout last week as UK Prime Minister Boris Johnson attempts to thrash out a Brexit deal with European leaders.

The UK is set to leave the EU on October 31 but, as yet, no divorce deal has been agreed.

Yet the uncertainty – and consequently fluctuating pound to euro exchange rate – is not happy news for travellers who are struggling to get the best deals on holiday money.

Starling bank CEO Anne Boden has offered Britons some handy advice to help, and insisted those ion the Eurozone particularly should switch their pounds to euros before they travel.

She said travellers should stay savvy when they arrive in their destination, and added: “Don’t accept any offer to ‘fix the exchange rate’ and never, ever accept the offer to convert to your own currency: it will leave you much worse off.

“Always select no, or whatever option is offered that won’t convert the sum into your own domestic currency.

“It’s also worth noting that the same scenario frequently pops up on card terminals when you spend money in shops and restaurants.

“Again, always ask to pay in the local currency.”

source: express.co.uk