The pound to euro has been trading in a tight range in recent weeks. With Boris Johnson announcing yesterday that the final stage of lockdown will be pushed back by a month, should you swap your travel money now?
He said: “Markets were, yet again, moribund yesterday, with the week getting off to an extremely sluggish start.
“There is, sadly, little on the docket that suggests today will be any different, with this morning’s UK labour market data likely to be ignored, and GBPEUR happy to do little more than tread water around €1.16.”
Yesterday was similar news when the pound continued to trade around the same mark.
At the time, Michael explained: “Sterling-euro continues to trade in a tight range just north of the €1.16 handle, with the market continuing to lack impetus to make a decisive move in either direction – broadly mirroring the broader G10 market, in fact.
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“With a quiet data docket in store today, the market is likely to do little more than mark time once more.”
George Vessey, UK Currency Strategist, Western Union Business Solutions, also explained that the delay to the full lifting of restrictions is a drag on the pound’s value.
He explained yesterday: “On the data front this week, jobs numbers are due out first thing Tuesday morning, and should show more signs of improvement.
“Inflation data drops in on Wednesday morning and retail sales wraps up the week on Friday morning.
“Against the euro, sterling has risen for five weeks on the bounce and lingers just under the €1.17 handle. Strong UK data this week could be enough to trigger a breakout north of this current resistance level.”
At the end of last week, the euro suffered a wave of “selling pressure” as traders “digested the dovish European Central Bank (ECB) meeting and favoured the cheap US dollar ahead of the Fed’s meeting”.
The expert added: “Amidst a lack of top-tier European data this week, investors will be focusing on the Fed’s rhetoric and how it compares to the ECB last week.
“The expectation is most major central banks will remain on hold from tightening monetary policy despite inflation worries, but a shift in policy stance could soon upend the calmness of financial markets at present.”
What does this mean for travel money?
With the current news that Boris Johnson is pushing back the date for lifting restrictions due to the rapid spread of the Delta variant, holidaymakers are once again faced with uncertainty about travel.
James Lynn, CEO and co-founder of Currensea explained that those heading on holiday should only swap their money once they are certain that plans are going ahead.
Ian Strafford-Taylor, CEO at travel money specialist FairFX said: “Yesterday’s confirmation of a delay to the so-called ‘Freedom Day’ didn’t come as a shock to many, and it seems the pound is weathering the storm too, with almost no movement against the euro compared to this time yesterday.
“Brits are yet to see how this delay to restrictions at home will affect their chances of an overseas summer holiday. However fresh speculation that foreign travel is unlikely to reopen to popular European destinations before August won’t do much to ease people’s minds. This comes as major airlines including British Airways, Virgin Atlantic and easyJet have started cancelling flights set to take off before July 19.
“Although it’s yet to be confirmed, this news will be a big blow for holidaymakers who have their hopes pinned on a summer break after so many months in lockdown.”
This post originally appeared on Daily Express :: Travel Feed