The pound to euro exchange rate “softened a touch” against the euro last night. It’s likely that today, traders will be able to evaluate the pound with a fresh pair of eyes. The pound is currently trading at 1.1186 against the euro, according to Bloomberg at the time of writing.
This is an improvement on Friday’s rate of 1.1173.
Last week, the pound notched higher against the euro in surprising gains.
It’s unclear whether this will continue into September as the coronavirus crisis worsens and Brexit trade talks continue.
Michael Brown, currency expert at foreign exchange firm Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures this morning.
He said: “Sterling has softened a touch against the euro overnight, pulling back from the 1.12 handle, as London traders prepare to re-enter the fray after the bank holiday weekend, potentially taking a fresh look at the rather lofty valuation of the pound.
“Manufacturing PMIs from both sides of the Channel highlight today’s data calendar.”
George Vessey, Currency Strategist at Western Union, said last week: “There are few fundamental reasons to buy the pound, with Brexit-related uncertainty lingering and the UK economy experiencing one of the worst recessions out of the developed nations.
“However, the technical setup appears bullish and GBP/EUR may drift towards €1.13 in the coming weeks.”
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He added: “The UK bank holiday Monday could bring forward month-end dealing (caused by portfolio managers rebalancing their portfolios) as soon as today, which may trigger some erratic price action.”
He continued: “Over the past few months, month-end flows have often benefited the Euro and British Pound, whilst the US Dollar and Japanese Yen have largely weakened.
“This is likely because of an adjustment of currency hedges on equity portfolios, and given the S&P500 has outperformed the EuroStoxx 600 in August, this suggests some upward pressure on EUR/USD once again.
“Nevertheless, it is never obvious which currencies will benefit from these flows, but it’s important to be aware of potential turbulent trading in major currencies over the next few days as a result.”
The Post Office is currently offering an exchange rate of €1.0785 for over £400, €1.0942 for over £500 and €1.0998 for over £1,000.
A lot of holidaymakers are currently keeping an eye on the UK’s travel corridor list to determine whether they should go abroad.
The government is reviewing the list weekly with some countries being added and removed each week depending on their coronavirus infection rates.
James Lynn, Co-Founder of Currensea told Express.co.uk: “It’s had a big impact on people’s holiday plans clearly.
“But in terms of the pound-euro exchange rate, I think it’s more driven by the perceived economic well-being of the UK versus that of the EU.
“Any really big spikes in a country can have an impact.
“But I think it’s really just down to good old-fashioned economic data which is the key driver of most the currency units.”
Currensea has launched a travel card that links directly to your bank account.
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