The pound to euro exchange rate remained “rangebound” yesterday, experts have said. This came as USA markets shut for Martin Luther King day, an American federal holiday marking the birthday of Martin Luther King Jr, observed on the third Monday of January each year. In the UK, comments from Chancellor of the Exchequer Sajid Javid over fears about weaker ties between the UK and European Union following Brexit, saw the pound remain under pressure.
Michael Brown, currency expert at Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures.
“Sterling remained rangebound on Monday as volatility was dampened across G10 FX with US markets closed for Martin Luther King Day,” said Brown.
“Today, the pound’s focus will be on the latest UK labour market figures.
“[These] should provide a further clue as to the BoE’s policy outlook.
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“Softer than expected figures will pose a headwind to the pound and result in markets pricing an even greater chance of a January rate cut.”
George Vessey, Currency Strategist at Western Union, added: “The pound appears more sensitive to economic data now that political turmoil has somewhat subsided given the UK is set to leave the EU on January 31.
“The surprisingly stronger pound reflects a general optimism about the potential for a long-term recovery for the cheap UK currency.
“Although UK wage growth is expected to slow once again, most eyes will be on sector activity as forecasts see a bounce back in flash PMI survey data, which could bode well for the pound and reduce the probability of a BOE rate cut on Jan 30.”
Added to this, euro sentiment fell as this week sees the European Central Bank’s (ECB) first policy meeting of 2020.
So what does this mean for your holidays and travel money this week?
The Post Office is currently offering a rate of €1.1272 for over £400 and €1.1494 for over £1,000.
Rob Stross, CMO of peer-to-peer currency exchange platform WeSwap, shared his advice on the best way to buy holiday money.
He said: “When it comes to travel money, with the peaks and troughs of the pound in light of Brexit, it’s difficult to plan when to buy your travel money.”
Stross continued: “To try and keep ahead of the fluctuations, and even make the most of them, there are several rate alert systems you can use. Our Smart Swap feature is one example of these.”
Travellers should also be savvy about when they buy their money. “We’ve also done research that shows nearly half of Brits buy all their travel money in one sitting,” said Stross.
“It can be wise, however, to exchange half your holiday money now and half closer to when you go or if the pound strengthens.”
The good news announced this month for British holidaymakers is that Brexit will not affect holidays in 2020.
The UK is now on track to enter a transition period at the end of the month.
This means that all travel requirements and arrangements will remain the same until at least the end of December 2020, travel association ABTA announced on Friday.