Pound to euro exchange rate skyrockets in ‘flash move’ amid UK lockdown end optimism

Travel money: Post Office introduce multi-currency pre-paid card

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The pound to euro exchange rate has continued to blaze upwards. GBP soared past “both the 1.16 and 1.17 handles” after hitting 10-month highs last week. Sterling has slipped slightly from the night’s lofty heights but still clings to success.

Looking ahead at today, comment is expected from the Bank of England which could be of interest.

The pound is currently trading at 1.1678 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.

“After a quiet day on Tuesday, the pound surged through both the 1.16 and 1.17 handles overnight, in something of a flash move with very little by way of news behind it,” said Brown.

“Though gains above 1.17 have been pared rather quickly, the bias for GBPEUR must remain to the upside, with a test of said level during European trade likely.

“Five BoE speakers will be making remarks today, with any comments on negative rates – though unlikely – of particular interest.”

Looking ahead, George Vessey UK currency strategist for Western Union Business Solutions, also shared his insight.

“UK Chancellor, Rishi Sunak, is expected to set out further plans to help the labour market in his Budget next week though, with an extension of the furlough scheme set to be announced along with other fiscal support measures to aid the economic recovery, said Vessey.”

“Sterling is the best performing currency year-to-date against the world’s reserve currency – the US Dollar.

“GBP/USD is about three percent stronger since the start of the year, nearly eight percent higher than six months ago and over 23 percent higher than the 2020 low.”

Britain’s response to the coronavirus has been attributed to the pound’s hike.

“The UK’s vaccine rollout is the main catalyst behind the uplift,” said Vessey.

“The pace of Britain’s vaccine rollout relative to other advanced economies is increasing the prospect of a faster economic recovery in the UK if restrictions are lifted earlier and stay successfully lifted.

“PM Johnson is aiming to have removed most restrictions by June 21. Sterling has also benefited from the general trend higher in risk appetite as capital continues to flow into risky assets as investors bet on the reflation trade.

“GBP/EUR has also consolidated above the key €1.15 handle, perhaps poised for a move closer towards €1.20 in the second quarter of the year.”

“Given sterling’s aggressive charge higher, particularly versus the dollar, there may be scope for a short-term retracement back under the $1.40 threshold, although focus has also turned to 2018’s higher zone around $1.43 potentially trading before any such correction is witnessed.”

So what does all this mean for your holidays and travel money?

The good news is, travel money providers are offering much more favourable rates than previously.

Post Office Travel is currently offering a rate of €1.1138 over £400, €1.13 for over £500, or €1.1357 for over £1,000.

However, experts warn against buying holiday money while uncertainty continues to reign amid Covid.

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