The pound to euro exchange rate saw a positive streak, hitting “fresh 13-month highs” just weeks ago, yet as concerns over vaccination regimes around the world mount, the exchange rate has plummeted. Yesterday, the pound slid to “six-week lows” as the experts predict the vaccination race is too slow.
The pound is currently trading at a rate of 1.1517 against the euro according to Bloomberg at the time of writing.
Speaking exclusively to Express.co.uk, Michael Brown, currency expert at Caxton FX, explained his insight into the recent changes to the exchange rate.
“It was another poor day for GBPEUR yesterday, with the cross sliding to six-week lows mid-afternoon, as the UK’s lead in the vaccination race looks set to shrink given the marked increase in supplies to the eurozone,” he said.
“Today’s calendar provides little of interest for the cross, though given how momentum-driven markets remain, further losses could be seen.”
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A slowing of vaccination rates has been the result of a hold up on exporting vaccines across parts of Europe, as well as fears over the link between the AstraZeneca vaccine and blood clots.
Despite this, experts are showing positive signs for the UK’s economic recovery as a result of lockdown easing.
On Monday, April 12, Prime Minister Boris Johnson gave the go-ahead for many businesses to reopen, including pubs, restaurants, hairdressers, gyms and non-essential shops,
George Vessey, UK currency strategist at Western Union Business Solutions said: “UK gross domestic product (GDP) rose 0.4 percent in February following a revised 2.2 percent contraction in January.
“All the main sectors of the economy witnessed output rise as consumer confidence spiked amidst a speedy vaccine rollout and lockdown measures lifting. GBP/EUR has jumped from multi-week lows but is still trading 1.6 percent lower month-to-date.
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“During the three lockdowns implemented to curb the spread of COVID-19, household savings have amassed an additional £180billion in bank accounts,which is hoped to be unleashed into the economy and kick-start the recovery.
“Every sector of the UK economy is still below pre-pandemic levels, but pent-up demand and a consumer boom may lead to output exceeding pre-crisis levels by the start of 2022.
“An underlying concern of such a speedy recovery though is the potential for inflation to massively overshoot the central bank’s two percent target, which could force higher rates and thus increase borrowing costs – tightening financial condition.”
Further relaxation of the UK lockdown is anticipated from May 17, when some international travel could resume.
Eager holidaymakers might be looking to get plans in order and exchange their travel money now.
The Post Office Travel Money is currently offering a rate of €1.1136 for amounts of £400 or more, or €1.1355 for amounts of £1,000 or more.
However, further holiday cancellations could result in more financial losses for holidaymakers who exchange their money too soon.
“Many people buy their holiday cash at a time when the rate is favourable even if that is months ahead of their actual trip,” said Paul Brewer, CEO of Currency Online Group.
“In normal times, this is very sensible as it locks in a good rate meaning they get more for their money.
“However, with unexpected changes in the quarantine rules week by week and with so much other uncertainty, this can leave you stuck with thousands of pounds worth of currency you can’t use.”
Instead, Britons should wait until there is further confirmation on which countries will be included on the UK’s “green list”.
More information on which nations will be given the green light for travel is expected in May.
