The pound has dropped to a 40week low against the euro after a week of slow softening in the aftermath of the 12 December general election. With Christmas tomorrow it is unlikely that any major political changes will occur. However, little is known about what changes will come in the new year.
The pound is currently trading at a rate of 1.1679 against the euro according to Bloomberg at the time of writing.
The GBP saw a huge surge following the general election, with the certainty of a Conservative landslide seeing sterling rise to a three-year high. However, in recent weeks this has steadily been declining back to its pre-election position, as concerns over a no-deal Brexit take hold.
It seems traders are wagering on certainty, with hopes of a deal providing a boost to the currency.
Meanwhile, the threats of a hard EU departure with little agreement between member states has had a negative impact on the pound.
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Travellers should try and change their money in advance, and be aware of any impending political occurrences which could cause turbulence.
With the rates likely to stay rangebound for the next week, travellers can anticipate a steady exchange rate.
However, there are other ways to make sure you get the most for your money whilst travelling.
Ian Strafford-Taylor, CEO of international money specialist Equals shared advice on when is best to buy holiday money: “As part of a wider analysis Equals recently found that if you bought currency when rates were at their lowest so far in 2019 compared to when rates were at the highest, the nation would have collectively lost £3.8billion (that’s around €123 each for every £1,100 exchanged) just by exchanging currency on the ‘wrong’ day,” he said.
“The safest way to guarantee an exchange rate you’re happy with is to lock-in the rate on a prepaid card when the pound is doing well.
“It also means you avoid losing money when you return from your trip and have to change any leftover cash back into pounds if the exchange rate has worsened.
A pre-paid travel money card can be purchased from a number of places including the Post Office, Fairfx and Caxton FX.
With one of these cards, travellers can load currency for their trip and top up whilst travelling if funds start to run low.
Not only do they allow travellers to lock in an exchange rate prior to travel, but they also give greater control overspending.
Mr Stafford-Taylor adds: “Anyone planning to a trip to the European winter markets needs to do their research first to avoid missing out.
“Monitoring exchange rates, arranging local currency before heading to the airport or using a prepaid foreign currency card will all help ensure that the festive fun doesn’t leave them short-changed on value.”