The pound to euro exchange rate dropped for the first time since Monday yesterday. This came as the dollar strengthened across the Atlantic while “a sharp souring of risk appetite on Wall Street” hit GBP, said experts. Looking ahead at today, both sterling and the common currency are likely to remain rangebound.
Very little data is due today that could impact the pairing.
However, the stock market will, as ever, play a role in the rate’s movements.
The pound is currently trading at 1.1203 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.
“The pound notched its first daily loss in three days against the euro yesterday,” said Brown.
“It faced headwinds from both a stronger dollar and a sharp souring of risk appetite on Wall St, which hit high-beta currencies such as sterling.
“Looking ahead, with today’s UK & EU data calendars rather barren, we could be in for a rangebound day for the pair, though the direction of travel will likely be determined once again by the stock market.”
George Vessey, UK Currency Strategist, Western Union Business Solutions, commented on euro strength yesterday.
He said: “Comments by European Central Bank (ECB) chief economist, Philip Lane, [on Wednesday] may have marked the first of many verbal interventions to try and prevent the Euro from strengthening much more from here.
“The upbeat market attitude of late has boosted global stock markets and riskier currencies higher but has also helped the cyclical Euro climb despite the extreme ‘long’ positioning of the common currency.”
Vessey continued: “Recoveries in the Eurozone are often kick-started by net exports, so because a stronger Euro may obstruct this, ECB policymakers may attempt to limit its appreciation by talking up more monetary accommodation and fiscal stimulus.
“Deflationary pressures in the Eurozone are also on the rise given the data out this week, which is also concerning for the ECB and is another reason for additional stimulus measures.”
So what does all this mean for your holidays and travel money?
The Post Office is currently offering an exchange rate of €1.0846 for over £400, €1.1003 for over £500 and €1.1060 for over £1,000.
In good news for those heading abroad, Post Office Travel Money found in its latest research that falling demand for hotel rooms since Covid-19 took hold in March means that accommodation prices have plummeted across Europe, leading to big reductions in the cost of city breaks.
The annual City Costs Barometer, which compares the cost of meals, drinks, city transport, sightseeing and accommodation in European cities, found last month that prices have plummeted in 22 of 24 cities in countries exempt from quarantine rules.
The biggest fall in the cost of 12 city break items surveyed was in Dublin, where prices are down 25.5 per cent, but, across the border in Northern Ireland, prices are 22 percent cheaper.
Belfast saw the second biggest fall of 25.2 percent, making it the best value UK capital with a barometer cost of £253.
Edinburgh (£269), Cardiff (£273) and London (£318) also saw year-on-year price falls of 9.9 percent, 7.1 percent and 14.4 percent respectively.
Cheapest of all are the Eastern European capitals of Vilnius (Lithuania) and Warsaw (Poland), with barometer costs totalling around £170.
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