The pound is currently trading at a rate of 1.1048 against the euro according to Bloomberg at the time of writing.
Though the pound has seen little growth overnight, seeing an increase of just 0.08 percent since yesterday, looming post-Brexit trade deals could bring about some significant changes in the coming weeks.
“Sterling traded unchanged against the euro on a rather mundane Monday yesterday, with little in the way of notable headlines or data releases from either side of the channel to rock the boat,” he said.
“A similarly quiet session is likely today, though attention will begin to swing round to the latest set of post-Brexit trade talks, beginning this morning.”
Negotiations between UK and EU leaders are set to restart today, with a focus on topics including “fisheries, judicial enforcement and level playing fields”.
This will be the seventh round of negotiations since Brexit.
“Sterling price action may be steered by UK-EU trade talks this week as negotiators meet from Tuesday-Friday in Brussels to discuss fisheries, judicial enforcement and level playing fields,” explained George Vessey, UK Currency Strategist at Western Union Business Solutions.
Donal Trump flies into Stansted airport for this reason [INSIGHT]
Pound to euro exchange rate: GBP struggles for strength [GRAPH]
Exchange rate: Should you change euros back into pounds? [INTERVIEW]
“The UK has vowed not to align on EU rules, including fishing rights, which continues to scupper hopes of a deal before year-end when the transition period expires.
He continued: The UK wants a free trade agreement like the one the EU already has with Canada, but the EU insists this is unattainable.
“The EU also insists the UK must agree a level playing field with Brussels, but that would see the UK tied to EU laws and regulations, which the UK is not willing to accept.
“As a result, the impasse persists and as the clock ticks down to the end of year deadline, sterling may come under selling pressure as investors fear the prospect of a no-trade deal scenario.”
Despite the concerns, however, UK officials remain positive that the trade talks will reach a conclusive end.
According to the Prime Minister’s spokesperson, a deal could be secure as soon as next month.
They added that negotiators will “continue to plug the gaps” during discussions.
However, Mr Vessey warned: “If the UK defaults onto World Trade Organisation terms with the EU, its biggest trading partner, this is expected to severely disrupt international trade, weaken the UK economy and possibly send the pound tumbling back towards the low levels traded in March against the US Dollar and Euro.”
With such uncertainty ahead for the pound, Britons with holiday plans are likely eager to get the best rates possible while they can.
The key to this is to stay up-to-date on relevant political changes and to shop around.
One other way to lock in a good rate is to opt for plastic rather than cash when spending abroad.
Travel money cards are prepaid currency cards which maintain the exchange rate from the time of purchase.
“If you buy at the wrong time or from the wrong place, you could miss out on hundreds of pounds,” said Ian Strafford-Taylor, CEO of FairFX (part of the Equals Group).
“With Coronavirus and a looming Brexit deadline, there is a lot of uncertainty ahead, which means the pound is vulnerable to further fluctuations.
“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.”