The pound to euro exchange rate did not show much change yesterday as markets remained “cautious.” Today marks the announcement of the new British Prime Minister stepping into Theresa May’s role. Should Boris Johnson become PM the focus will likely switch to the plan of Brexit, experts have said. Yet if fellow contender Jeremy Hunt wins, the pound could well show improvement.
The pound is currently trading at €1.113 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 trod water against the common currency on Monday,” he said, “with market participants remaining in a cautious mood ahead of a number of key risk events this week – including the results of the Conservative Party leadership contest and the ECB’s latest monetary policy decision.
“Today, focus for the pound will remain on political developments, with the victor of the Conservative Party leadership election, and therefore new Prime Minister, set to be announced this morning.
“The likely result, a Boris Johnson victory, seems to be priced into the pound, hence focus will quickly switch to both Cabinet appointments and the plan for Brexit.”
Chancellor of the Exchequer Philip Hammond and Lord Chancellor David Gauke have said they will step down if Johnson wins.
Brown continued: “However, should Jeremy Hunt pull off an unlikely victory, sterling would likely move to the upside.
“Either way, political uncertainties show no sign of dissipating, making significant sterling appreciation unlikely.”
The European Central Bank (ECB) appears poised to unveil fresh stimulus leaving Euro traders increasingly jittery.
This came following last week’s Eurozone inflation data, which failed to meet the ECB’s target of 2 per cent.
So what does this mean for holidaymakers? Money Saving Expert Martin Lewis has shared his advice on withdrawing travel money ahead of a holiday.
Lewis wrote on the Money Saving Expert website: “Currency moves are complex. Anyone who says they know what’ll happen is a liar. I certainly don’t.
“If you’re worried, buy roughly half at today’s best rate, locking that in, and the rest at the best rate when you travel.
“If your real fear is rates plummeting, making your holiday unaffordable, play safe and buy more now.”
He also advises 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 GMB.
“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.”
