The pound to euro exchange rate soared yesterday as hope for a Brexit deal surged. Reports emerged that the UK and European Union (EU) were close to a draft agreement. This comes ahead of the all-important EU summit taking place on Thursday. Further Brexit optimism today could see GBP rise further with both EU Negotiator Michel Barnier and Prime Minister Boris Johnson making addresses.
The pound is currently trading at 1.1563 against the euro, according to Bloomberg at the time of writing.
Michael Brown, currency expert at Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures.
“Sterling rallied to a fresh five-month high against the common currency on Tuesday, as hope of a Brexit deal was rekindled after reports that the UK and EU were closing in on a draft agreement ahead of Thursday’s crunch EU Summit,” said Brown.
“Today, all the political jigsaw pieces seem to be in place to allow a deal to be unveiled, though talks between both negotiating teams continue this morning.
“Later today, EU Negotiator Barnier will brief EU Ambassadors, while PM Johnson will separately address Cabinet and backbench Tory MPs.
“Confirmation of, or further moves towards, a Brexit deal will result in further sterling upside.”
Sebastien Clements, currency analyst at OFX, added: “After a week of positive Brexit headlines, it was almost too good to be true for the pound. Now it seems that the light at the end of the Brexit tunnel has dimmed, as the Democratic Unionist Party shows renewed resistance to Boris Johnson’s proposed backstop alternative.
“Johnson’s challenge is now to identify the issues that the DUP have and go back to Brussels to request a short-term extension in order to ensure his progress doesn’t go to waste. In response, the pound has dropped from 1.27 down towards 1.26, before tentatively recovering back to the 1.27 level.”
Yesterday morning, leader of the House of Commons, Jacob Rees-Mogg said that if the Prime Minister can get a Brexit deal with the EU, the government will have the votes to pass it through the House.
Mogg told LBC: “If a deal is agreed with the European Union, it will get through, in my view, the House of Commons because everybody’s desperate to finish this.”
So what does this mean for British holidaymakers hoping to buy travel money before they jet away during this period of Brexit uncertainty?
The Post Office is currently offering a rate of €1.1023 for over £400 and €1.1263 for over £1,000.
Britons are being urged to be savvy when it comes to withdrawing holiday money. Cash withdrawals using a debit card typically deduct up to 3 percent of what you take out or charge a minimum fee of up to £2.
Some credit cards will charge you interest for cash withdrawals on top of other fees.
Additionally, contactless payments with a traditional bank or credit card, may be liable to currency and bank charges.
“It’s always worth shopping around,” Norris Koppel, Founder and CEO at banking service Monese.
“There are a growing number of ways that holidaymakers can exchange and spend cash when abroad from using mobile-only alternatives contactless, to pre-paid cards and fee-free banking services.”
Money Saving Expert Martin Lewis has advised Britons to make the most of overseas credit cards. “If you normally spend abroad on debit or credit cards, while the providers get near-perfect rates, most add an up to three per cent ‘non-sterling exchange rate fee’ on top – meaning something that costs £100 costs you £103,” Lewis told ITV’s Good Morning Britain.
“Yet specialist overseas credit cards don’t add that fee, so you get the same near-perfect exchange rate as the providers – smashing bureau de change – in every country, every time you go away. Just ensure you pay the card off in full each month to minimise the interest.”
