The pound to euro exchange rate experienced limited movement yesterday. This was due to “little in the way of headlines for investors to chew over.” The European Central Bank (ECB) held interest rates at 0 percent in its first rate decision of the year.
On Thursday, the ECB explained interest rates would remain flat until the bloc’s inflation outlook is seen to “robustly converge” to just below two percent.
The euro remained unmoved against the pound, however, as the bank maintained its “wait and see” approach to policy.
Furthermore, Stefaan De Rynck, a top advisor to the European Union’s Chief Brexit Advisor Michel Barnier, said that there was a much-needed “dose of realism” required in UK-EU Brexit trade deal negotiations.
However, today could be set to have a greater impact on sterling, said experts.
Flash January PMI surveys are released today which will set the tone for the Bank of England’s policy decision next week.
If the UK Markit services PMI confirms consensus and rises from 50 to 51, this would lower the odds of an interest rate cut from the Bank of England next week.
Eyes are peeled for “a post-election ‘Boris Bounce’ in the UK economy to further price out the chances of a rate cut,” according to experts.
The pound is currently trading at 1.1882 against the euro, according to Bloomberg at the time of writing.
Michael Brown, currency expert at international payments and foreign exchange firm Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures.
“Sterling remained subdued yesterday, with little in the way of headlines for investors to chew over, however, today should be significantly more interesting,” said Brown.
“This morning’s flash January PMI surveys are the final piece of the data puzzle ahead of next week’s coin-flip Bank of England policy decision.
“Investors [are] looking for signs of a post-election ‘Boris Bounce’ in the UK economy to further price out the chances of a rate cut.”
So what does this mean for Britons heading off on their holidays and buying travel money?
The Post Office is currently offering a rate of €1.1415 for over £400 and €1.1640 for over £1,000.
Today, in a historic moment, the EU commission’s Ursula von der Leyen and Council’s Charles Michel put their signature to Boris Johnson’s Brexit deal at a sombre ceremony in Brussels.
A copy will now be sent to Downing Street to allow the Prime Minister to complete the process ahead of its ratification in the EU Parliament next week.
Many holidaymakers wonder what Brexit will mean for holidays to the continent.
However, Brexit will not impact trips this year travel association ABTA has said.
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.