As for the week to come, politics will likely be the driving force for the pound.
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 notched its fifth straight loss against the euro on Friday,” said Brown.
“[It ended] the week at its lowest levels since March, while also chalking up the biggest one-week decline in six months.
“[This came amid] mounting Brexit uncertainties and backward steps in controlling the coronavirus piled on the pressure on the pound.
“Looking ahead, the political situation will be sterling’s primary driver this week, with a busy data calendar set to be ignored by traders, who are instead set to remain focused on the likely outcome of post-Brexit trade negotiations.”
George Vessey, Currency Strategist at Western Union, added: “The UK government’s bill, which will override the Brexit divorce deal, has reignited no-deal Brexit fears. As a result, last week saw sterling suffer its worst weekly decline since the height of the pandemic-induced market turmoil in March.
“GBP/EUR fell over 4 percent to test a key support level in the €1.07 neighbourhood. GBP/USD fell over 5 percent from the near $ 1.35 top printed earlier in the month.
“Despite the precipitous fall last week, the downside pressure on sterling may continue to build given sentiment wasn’t overly bearish prior. More traders were actually “long GBP” (betting on sterling rising) at the start of the month, compared to “short” (betting on it falling), but usually, during heightened no-deal Brexit fears, the market is usually very net-short GBP. The rapid pace of sterling’s decline reflects this mismatch, and so given the lack of GBP shorts, this drop could go much deeper.
“GBP/USD could potentially head towards $ 1.25 if the 200-day moving average support level at $ 1.2740 breaks. GBP/EUR could fall under €1.07 and the 12-year low printed in March near €1.05 could be the next downside target.
“Focus this week will be on the government’s internal market bill debate in Parliament where is it expected to be eventually passed. Its negative impact on UK-EU trade talks is expected to weigh heavily on sterling.”
So what does all this mean for your holidays and travel money?
The Post Office is currently offering a rate of €1,0422 for over £400, €1.0573 for over £500 or €1.0627 for over £1,000.
The best way to make sure you’re getting the most bang for your buck when it comes to purchasing holiday money is to monitor the exchange rate.
Marianne Gilmore, Managing Director, Private International Payments at currency provider moneycorp advised the first step when doing this should be to check on how the currency you want to buy has changed over the past month.
“Consider your desired currency’s previous rate fluctuations in the last month,” she said.
“From these values, budget a realistic window as to what rate you’d be willing to exchange on, bearing in mind that an additional commission fee may apply when you actually exchange your money.”
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Tracking tools can be your best friend when looking to see at which point the pound is performing best.
“In order to help you keep your finger on the pulse of currency fluctuations, some foreign exchange providers will have useful tracking tools,” said Gilmore.
“For example, with a moneycorp account, you can set up a free currency exchange rate alert, something a lot of our customers do.
“You set your desired currency rate either online or through our app, and as soon as it reaches your ideal exchange rate we will notify you via email so you can easily purchase your currency.
“This saves a lot of time, and reduces the need for our customers to constantly check the rates.”
Source:Daily Express :: Travel Feed