The pound to euro exchange rate has remained in a tight range over the course of the last week as traders eagerly await the European Central Bank’s (ECB) monthly monetary policy decision. According to experts, while sterling has seen a boost in recent months, it now faces new “pressure” as traders await the Government’s decision regarding the June 21 “unlock”.
The pound is currently trading at a rate of 1.1597 against the euro according to Bloomberg at the time of writing.
Michael Brown, currency expert at Caxton FX said: “As expected it was another quiet day for the cross yesterday, which continues to do little more than tread water.
“Today’s ECB decision may – hopefully – inject a bit of volatility into the market, though with consensus expecting no policy shifts, those hopes may prove to be misplaced.”
Despite optimistic the ECB decision will spark some movement within the rates, there are growing concerns the Stage Four “unlock” of England will be pushed back a number of weeks.
“GBP had been under pressure following expectations that the June 21 ‘freedom day’ will be pushed back,” explained George Vessey, UK currency strategist at Western Union Business Solutions.
“Indeed, Chancellor of the Exchequer Rishi Sunak is willing to accept a delay of up to four weeks to the final stage of England’s reopening roadmap.
“Sunak has in the past been regarded as more keen to lift lockdown constraints than some cabinet colleagues.
“However, that position has since been clarified, that he was more concerned that when restrictions are lifted, the move can be permanent.”
Brexit relations between the UK and EU have also caused some concerns for traders in recent weeks.
Mr Vessey continued: “Sterling is struggling with fresh tensions about the implementation of the Northern Irish protocol.
“A meeting between the European Union’s Maroš Šefovi, European Commission Vice President and UK’s David Frost in London will be closely monitored by GBP traders.”
For those looking to exchange their pounds for euros in the coming weeks, the constant changes could be rather confusing.
Customers are advised to keep an eye on any political developments which could sway the rates in the lead up to their holiday.
Given the uncertain state of International travel, James Lynn CEO and co-founder of Currensea says Britons should only swap their foreign currency once they are certain their travel plans are going ahead.
In many cases, holidays are likely to be a last-minute affair amid the ever-changing traffic light rules.
Should this be the case, there is still some planning which could help customers get more bang for their buck.
“Do not exchange your money last minute at the airport, the rates are generally much less favourable than online or high-street alternatives, so preparation is key,” said Mr Lynn.
“If you find yourself acting on impulse, booking a last-minute break and needing to collect your euros upon your departure date, try to order them for collection in advance of your travel dates to take advantage of the best possible rates.”
He added: “For the best rates, take out a travel money card now.
“It doesn’t fully replace having currency in hand when you land, but once there you can use these at no cost for spending or withdrawing from a cash machine.”