The pound to euro exchange rate “modestly gained ground” on Thursday as the trading week drew towards a close. GBP’s slight improvement came despite a disappointing services PMI survey. Sterling also benefited from markets pricing out the risk of a no-deal Brexit. This was despite Johnson’s proposal to replace the backstop with alternative arrangements being met with scepticism.
After official EU commentary described the Prime Minister’s proposal for a new deal as not “even remotely” acceptable, there were renewed hopes that there could be an extension beyond the 31 October Brexit deadline. Investor confidence in a Brexit breakthrough increased as a result.
The European Parliament said in its statement: “Safeguarding peace and stability on the island of Ireland, protection of citizens and EU’s legal order has to be the main focus of any deal. The UK proposals do not match even remotely what was agreed as a sufficient compromise in the backstop.”
The British government must now comply with new legislation requiring they seek an extension to Article 50, effectively blocking a Halloween no-deal outcome.
The pound is currently trading at 1.1250 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 modestly gained ground against the single currency on Thursday,” said Brown.
“Markets continued to price out the risk of a no-deal Brexit despite PM Johnson’s proposal to replace the backstop with alternative arrangements being met with scepticism in EU capitals.
“The pound also shrugged off a disappointing services PMI survey, pointing to just the fifth contraction in the sector over the last 10 years.
“The pound will continue to be driven by political developments today, with investors set to continue paying close attention to the progress of UK-EU discussions over a fresh Brexit deal.”
So what does this mean for holidaymakers looking to withdraw travel money for their trip away? The Post Office is currently offering a rate of €1.0817 over £400 and €1.1030 for over £1000.
A recent survey by banking service Monese has revealed 28 per cent of holidaymakers don’t know they pay any commission or fees when exchanging £100 into foreign currency.
Over half of Brits said they withdraw holiday money from their bank branch and a quarter of the UK public believe that this is the most cost-effective solution to exchanging holiday money, while 22 per cent think contactless represents the best value for money.
However, cash withdrawals using a debit card typically deduct up to 3 per cent of what you take out or charge a minimum fee of up to £2. Some credit cards will charge you interest for cash withdrawals on top of other fees. Additionally, contactless payments with a traditional bank or credit card may be liable to currency and bank charges.
Norris Koppel, Founder and CEO at Monese, said: “Consumers aren’t currency traders, so any fluctuation creates uncertainty. Factor in hidden bank fees, ATM charges and poor exchange rates and your money further depreciates. We increasingly see holidaymakers, students, expats or those with family abroad looking to protect themselves from fluctuations.
“It’s always worth shopping around. There are a growing number of ways that holidaymakers can exchange and spend cash when abroad from using mobile-only alternatives contactless, to pre-paid cards and fee-free banking services.
“Being hit by hidden fees and commission is always frustrating but especially during a time when the Euro and Dollar are hitting highs against the Pound, weakening our spending power. We want holidaymakers to make the most of their hard-earned cash when spending abroad.
“Switching to a banking service that offers fee-free withdrawals from ATMs around the world, on cash top-ups and foreign currency spending, is a straightforward way for customers to avoid unnecessary fees and poor exchange rates.”