Travel money: Post Office introduce multi-currency pre-paid card
The pound to euro exchange rate has soared this morning, navigating well beyond the 1.13 mark. According to experts, the pound is performing “well” and “holding its ground.” This is in thanks, in part, to the success of the UK’s Covid vaccination programme.
Investors are focussing on this triumph compared to “global peers.”
New data is out today but is unlikely to impact “bullish sterling”.
The pound is currently trading at 1.1335 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 this morning.
“Sterling continues to perform well against the euro, holding its ground above the 1.13 mark,” said Brown.
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“Investors continue to focus on the UK’s impressive pace of covid vaccination when compared to global peers.
“Today, Q4 eurozone GDP shouldn’t matter too much for the market, leaving the bullish sterling trend to run another day.”
George Vessey, currency strategist at Western Union Business Solutions, shared his insight on the week ahead.
“The Bank of England (BOE) holds its first policy meeting of 2021 this Thursday,” he said.
“It is known as ‘Super Thursday’ because new economic projections are released along with the policy decision, meeting minutes and press conference. A review of negative interest rates will also be unveiled.
“The British Pound has benefited recently from the increasing global risk appetite, the rapid UK vaccine rollout and fading prospects of negative UK interest rates.
“However, economic growth forecasts in the UK have been downgraded for this year and flash PMI data last week underscored this worry.
“This week, all eyes will be on the BOE’s new economic forecasts and any changes to monetary policy suggested for the future to support the economy through the pandemic.
“If negative interest rates are removed from the equation completely, the pound should gain and GBP/USD would look to claim the $1.38 handle whilst GBP/EUR could stretch towards €1.14.”
Vessey continued: “The euro came under selling pressure last week following reports that the European Central Bank (ECB) will access policy impacts on exchange rates.
“Meanwhile, investors will examine some top-tier macro data from the bloc starting with the Q4 GDP result on Tuesday, inflation on Wednesday and retail sales on Friday.
“Hints that policymakers would use tools to deter further EUR appreciation if needed, combined with cutting rates deeper into negative territory, weighed on the common currency.
“The economic landscape of the Eurozone is weaker than the US and China and this divergence is forecast to continue.
“Key data from the bloc this week is likely to underscore this, with downward pressure on inflation still a headache for the ECB, which could be a major headwind for EUR/USD going forward.
“If EUR/USD takes a sharp U-turn to the downside then GBP/EUR could capitalise on Euro weakness and extend beyond the €1.15 threshold, a level not traded since April 2020.”
So what does all this mean for your holidays and travel money?
Post Office Travel is currently offering a rate of €1.0921 over £400, €1.108 for over £500, or €1.1136 for over £1,000.
However, experts have warned against exchanging any currency at this uncertain time.
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