The pound to euro exchange rate has risen daily over the past few days. The GBP hit a nine month high before rising to a ten month high yesterday. Coronavirus continues to be a barometer of sterling movements.
Michael Brown, currency expert at international payments and foreign exchange firm Caxton FX, spoke to Express.co.uk this morning about the latest exchange rate figures.
“The pound sterling hit a new 10-month high against the common currency yesterday,” Brown said.
“Although these gains were short-lived, the cross could not withstand a significant break in the 1.15 handle and retreated overnight.
“However, given sterling fundamentals that remain attractive and markets still strongly driven by momentum, we expect further progress.”
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George Vessey, British currency strategist at Western Union Business Solutions, also gave a glimpse into yesterday’s performance.
“The pound sterling jumped to a 10-month high against the euro … breaking the key level of EUR 1.15 after UK inflation data surpassed projections.
“An increase in spending on furniture, housewares and groceries led to higher inflation in January, while clothing and shoe prices remained subdued.
“The 12-month UK Consumer Price Index (CPI) rate was +0.7 percent in January versus +0.6 percent in December, beating expectations of +0.5 percent pressure.”
He continued: “In the meantime, the core inflation indicator (excluding volatile food and energy products) reached +1.4 percent year-on-year compared with +1.4 percent in November, beating the consensus forecast of +1.3 percent.
“The GBP / USD pair was a bit weaker at the start of the European session and was rather subdued to the UK inflation release.
“The downside remains limited, although it is optimistic that the impressive pace of vaccination in the UK would allow UK Prime Minister Boris Johnson to lift COVID-19 restrictions and get the economy going.
“PM Johnson is considering a phased exit from the COVID-19 lockdown, with pubs and restaurants reopening in May and the hospitality and vacation industries reopening in July.”
What does all this mean for your vacation and your travel money?
The good news is that travel money providers are offering much cheaper rates than they were before the exchange rate hike.
Post Office Travel is currently offering a price of € 1.1077 for over £ 400, € 1.1238 for over £ 500 or € 1.1295 for over £ 1,000.
However, experts warn against buying travel money in these uncertain times when travel is banned for Britons.