The pound to euro exchange rate has seen some turbulence in recent weeks, soaring to post-election highs before gradually slipping back. With a mostly bare political calendar, until UK-EU trade talks restart, sterling is likely to stay rangebound within the coming days, though the threat of coronavirus threatens.
The pound is currently trading at a rate of 1.1940 against the euro according to Bloomberg at the time of writing. Though it achieved a modest boost against the euro on Tuesday, it seems to have slumped back down overnight, reducing by 0.10 percent.
Michael Brown, Currency Expert at Caxton FX told Express.co.uk: “Sterling ticked modestly higher against the euro on Tuesday as markets continued to monitor UK-EU relations ahead of trade talks beginning next month.
“Today, with another barren economic calendar in store, investors will closely follow any political developments; while risk appetite will likely be driven by the coronavirus outbreak.”
In recent days traders have kept their eyes on the rapidly developing coronavirus, which has spread from Wuhan, China to the rest of the globe.
It has majorly impacted the economy, changing the way people travel and spend. Industries across the world are now suffering as a result of the fast-spreading and highly contagious disease.
One of the worst affected regions is Asia, with Hong Kong’s hospitality sector reporting a major decline. Meanwhile, airlines and travel services have reduced or completely put an end to routes to and from China, cutting the region off from the rest of the world. British Airways and Virgin Atlantic both haunted flights to China, meanwhile limiting service to Hong Kong.
They were joined by KLM, Air France, Lufthansa, SAS, Iberia, Air Canada, Cathay Pacific and United also followed suit, slashing flights to China due to lack of demand.
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If things continue this way, it is unlikely the pound will see any major boosts until the UK-EU trade talks begin again in March. Prime Minister Boris Johnson will be working to secure viable trade and immigration deals with EU countries.
Those that are viewed as successful could help supply the pound with some much-needed strength. Though, as seen during earlier Brexit negotiations, political occurrences can also have the opposite effect on the pound.
Ian Strafford-Taylor, CEO of FairFX commented: “Holidaymakers are already at the mercy of rollercoaster currency rates thanks to continued Brexit uncertainty, but now risk further rate turbulence as the already high airport margins are getting worse still.
“The safest way to guarantee getting more currency for your cash is to plan ahead and avoid changing currency at the last minute at airport exchange desks altogether.”
The Post Office is currently offering a rate of €1.1486 for amounts of £400 or more, €1.1653 for £500 or more and €1.1712 for 1,000 or more.
Travellers are advised to shop around to secure the best rates, and can even lock them in by opting for a travel money card.
The card can be used just like a debit card for purchases and cash withdrawals.
Ian continues: “The best way for holidaymakers to get more for their money is to keep a very close eye on how the pound reacts over the next few days and lock in rates when they’re happy as there is no guarantee they will improve for the better.”
The good news is, despite the turbulence, data from the post office’s most recent Travel Money Report reveals that the pound is still stronger year-on-year against 80 percent of the top 40 currencies.
Furthermore, each currency appears to be weaker than last summer.
However, if tourists want to ensure they have the most cost-efficient travels, they could do with opting for certain destinations.
According to the most up-to-date Post Office Worldwide Holiday Costs Barometer Corfu is a destination which boasts the best prices for UK travellers.
Food and drink prices have reportedly deduced by 20 percent in the last 12 months.