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.
“Sterling softened against the euro yesterday,” he said.
“[This was] a largely technically-led move, with the pair kissing the 50-day moving average before sharply pulling back lower.
“This implies that the upside momentum is not yet there to push the pair to further gains.
“Today, this morning’s UK GDP figures are a lagging indicator so will likely be ignored, and attention will remain on the latest coronavirus developments.”
George Vessey, currency strategist at Western Union, commented on how the UK economy is recovering less than expected following the GDP figures.
“The monthly UK GDP reading was released earlier this morning to reveal the economy expanded 1.8 percent m/m in May versus the 5.5 percent expected,” he said.
“The pound remains depressed in the lower realms of the $ 1.25 area against the US Dollar.
“Although the GDP print shows the UK economy sharply rebounded from the 20.4 percent contraction experienced in April, the softer-than-expected pace of the rebound will likely keep sterling upside at bay. Over the three months to May, the economy shrank by 19.1 percent and compared with a year ago it is 24.0 percent smaller.
“Meanwhile, the GDP increase was supported by an 8.4 percent monthly expansion in the manufacturing sector and a 6 percent rise in industrial output. GBP/USD recoiled sharply from the $ 1.2670 resistance zone yesterday, just 30 pips shy of the pivotal 200-day moving average. GBP/EUR has also dropped over one cent in 24 hours.
“Sterling’s correlation with stock prices has strengthened over recent months due to their relationship with risk appetite. As US stocks slipped lower yesterday, the pound also weakened amid the rise in risk aversion associated with surging Covid-19 cases globally.”
Travel money providers have started back up again in recent weeks as travel kicks back into gear.
Holidaymakers still need to be careful when buying holiday money.
It is wise to keep an eye on the exchange rate to make sure you are buying holiday money at an advantageous time rather than at the last minute.
“Currency must play a pivotal role in holiday planning, and savvy holidaymakers should be keeping a very close eye on currency and its reaction to the latest political events,” Ian Strafford-Taylor, CEO of currency expert FairFX said.
Previous research from currency provider WeSwap found that nearly half of all Britons find and buy their foreign currency in the space of one day.
This leaves them vulnerable to forces beyond their control that dictate the strength of the pound.
Tourists should also avoid buying currency at the airport.
According to Martin Lewis’s Money Saving Expert website: “Whatever you choose, never buy your currency at the airport.
“Rates are hideous, as you’re then a captive audience.
“If you’ve left it late, at least order ahead for pickup at the airport, as rates are much better than simply walking up to a bureau.”
It is also well worth choosing a country where the pound is likely to stretch further.
“By choosing a destination where the pound is strong, the amount of money you need to enjoy yourself while you’re abroad will decrease, allowing you to see more of the world, for much less,” explained Strafford-Taylor.