The pound to euro exchange rate has “faced headwinds” as the Bank of England (BoE) prepares to make its policy decision tomorrow. This saw GBP struggle yesterday after remaining rangebound on Monday, experts have said. Looking ahead at today, sterling is unlikely to show much movement.
However, BoE’s decision on Thursday could see the pound to exchange rate impacted.
Many analysts argue the results of the BoE meeting are still too close to call, despite stronger than expected data at the end of last week.
Deutsche Bank strategist, Jim Reid said: “This [BoE] meeting follows a run of fairly weak economic data over the last few weeks but with last week’s strong employment data and better than expected flash PMIs confusing the picture.
“Our economists have expected a cut for a good couple of months now, but markets are closer to 50:50.”
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The pound is currently trading at 1.1821 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.
“Sterling struggled against the common currency on Tuesday, testing the key €1.18 level,” said Brown.
“The pound faced headwinds ranging from jitters ahead of tomorrow’s BoE decision to the broader shaky risk sentiment in financial markets.
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“Today, the UK calendar sees no major data releases, hence sterling will likely tread water ahead of tomorrow’s all-important, knife-edge policy decision.”
Brexit, too, remains a source of uncertainty and has jumped back to the forefront of investors’ minds with Friday’s due date nearing.
Jeremy Stretch, CIBC Capital Markets’ head of G10 currency strategy said: “It’s been a case that Brexit issues have been off the agenda for a while, but there are now some signs of friction between the two sides as negotiations are gearing up, and that might be a source of consternation.”
So what does this mean for your holidays and travel money?
The Post Office is currently offering an exchange rate of €1.1397 for over £400 and €1.1622 for over £1,000?
With Brexit looming, is it best to buy your holiday money as soon as possible?
Rob Stross, CMO of WeSwap, shared his advice on the best way to purchase travel money.
He said: “When it comes to travel money, with the peaks and troughs of the pound in light of Brexit, it’s difficult to plan when to buy your travel money.”
He advised: “To try and keep ahead of the fluctuations, and even make the most of them, there are several rate alert systems you can use. Our Smart Swap feature is one example of these.”
Travellers should also be savvy about when they buy their money. “We’ve also done research that shows nearly half of Brits buy all their travel money in one sitting,” said Stross.
“It can be wise, however, to exchange half your holiday money now and half closer to when you go or if the pound strengthens.”
