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The pound has recorded several days of daily growth against the euro after weeks of sudden downfalls. It comes as Brexit trade talks ramp up in time to meet the looming transition period deadline.
As of December 31, the UK will officially depart from the EU.
In a bid to ensure deals are struck with enough time to ratify details, ministers hope to have all trade negotiations hammered out by the end of October.
In recent weeks this uncertainty has led the exchange rate to fluctuate.
It has seen the pound plummet to dramatic lows before slowly climbing its way back up as deals look more secure.
Alongside Brexit negotiations, the ongoing coronavirus pandemic has also played a part in determining the strength of sterling.
The pound is currently trading at a rate of 1.1016 against the euro, according to Bloomberg at the time of writing.
With more negotiations between the UK and EU set to resume in Brussels today, traders will keep a close eye on any signs for whether a “deal” or “no-deal” is on the horizon.
Michael Brown, currency expert at Caxton FX spoke exclusively with Express.co.uk to share his insight into the current rates.
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“Sterling rose to three-week highs against the euro yesterday, chalking up its fourth straight daily gain, as the market begins to strike a much more upbeat tone on the chances of a post-Brexit trade deal being agreed, after positive media reports,” he said.
“That theme is set to dominate all week, with market participants set to pay close attention to the ninth round of formal UK-EU negotiations, beginning in Brussels today.”
Though in the past the pound has fallen at the suggestion of a “no-deal” Brexit and has seen a boost when a “deal” has been on the horizon, according to one expert this has made little difference in recent weeks.
“Sterling remains spectacularly blasé to the risks of a no-deal Brexit which sits a mere few weeks away,” pointed out Jeremy Thomson Cook, economist at Equals (formerly known as FairFX).
“An extension seems the logical choice given the pressures that COVID-19 has put on both businesses and the political apparatus of the UK and EU.
“This is Brexit however; we have become used to a lack of logic from both sides,” he added.
Holidaymakers with travel plans in the coming weeks and months may find it concerning that there remains so much uncertainty around the exchange rate.
Though staying up-to-date on relevant political developments is certainly beneficial, there are some other ways Britons can make sure they get the most bang for their buck.
James Lynn, an expert from Currensea, suggested holidaymakers consider opting for a travel money card.
These are offered by travel money providers such as The Post Office Travel Money, and allow holidaymakers to use them much like a debit card when abroad.
Similarly, some banks offer debit and credit cards which link directly to personal bank accounts which can be used abroad and often offer decent exchange rates.
He explained: “Using a travel card will always be a safer and cheaper option than using cash.
“The best way to handle money abroad is to use a travel card and withdraw a small amount of cash if and when you need – but be sure to check if your provider charges you for ATM withdrawals to keep the cost down.”
Ian Strafford-Taylor, CEO of Equals, was in agreement – though he says pre-paid travel money cards offer even more benefits.
“Using a prepaid card gives you more control over exchange rates, whether you’re topping up before you travel or while you’re away, protecting you from unstable markets and further fluctuations,” he said.
“Using a prepaid card reduces your risk of being caught out by these sneaky charges when spending abroad.”
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