The pound is trading modestly against the Euro after markets priced in a higher chance to the Bank of England cutting rates. The news follows “lacklustre” inflation results, however with little in the way of major political decisions this week, it is thought the pound will continue to tread water.
It’s a positive spin on what began as a slow week, with sterling sitting lower against the euro and other major currencies on Monday.
Since then it had seen a minor rise of 0.04 percent to a more comfortable position.
The pound is currently trading against the euro at a rate of 1.1699 according to Bloomberg at the time of writing.
Michael Brown, Senior Market Analyst for Caxton FX, told Express.co.uk: “Sterling struck a modestly softer tone against the single currency yesterday, as markets priced in a greater chance of a BoE rate cut on the back of lacklustre inflation figures, pointing to the slowest pace of price increases in more than three years last December.
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Pound to euro exchange rate: The pound has experienced a modest boost
Pound to euro exchange rate: The pound is currently trading at a rate of 1.1699
“Today, the data calendar is quiet, hence the pound will likely tread water ahead of tomorrow’s all-important retail sales report.”
Yesterday’s results revealed that the UK’s inflation rate dropped to its lowest for more than three years, with a drop of 1.3 percent in the last month.
Analysts believe this will boost the chances of a rate cut.
The soft inflation data for December is said to increase the likelihood of a Bank of England rate cut on 30 January.
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What effect this will have on the pound is unknown.
As always, major political changes are likely to rock the pound’s position, with Brexit only days away. The UK is yet to strike a deal with the EU, though Prime Minister Boris Johnson has maintained a positive outlook in recent days.
Holidaymakers could be celebrating favourable results if a deal is struck in time.
Pound to euro exchange rate: How can holidaymakers get the best rates?
The Post Office is currently offering a rate of €1.1278 for over £400 and €1.1500 for over £1000.
So, how can holidaymakers be sure to get the most for their money when spending on the continent?
Experts always recommend changing money in advance of your travels.
Airport and some foreign beauro de changes often charge extra admin fees.
Meanwhile, unexpected political changes can have a negative impact on your holiday money.
Keeping an eye on political news can be the key to avoiding major plummets.
Rob Stross, CMO of WeSwap, said: “When it comes to travel money, with the peaks and troughs of the pound in light of Brexit, it’s difficult to plan when to buy your travel money.”
He advised: “To try and keep ahead of the fluctuations and even make the most of them, there are several rate alert systems you can use. Our Smart Swap feature is one example of these.”