Pound to euro exchange rate: Sterling ‘slides’ in second daily loss amid Brexit ‘jitters’

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The pound to euro exchange rate “slid” on Friday at the end of the trading week. Sterling’s second daily loss in a row comes as Brexit uncertainty continues to be the driving force of the exchange rate. The UK left the EU on January 31, 2020, however, Britain is currently in a “transition period” until December 31, 2020.

The two sides are yet to negotiate a trade deal which is vital to any future EU-UK relationship.

Sterling is currently struggling to claw its way above that 1.10 handle.

The pound is currently trading at 1.0912 against the euro, according to Bloomberg at the time of writing.

This is slightly below Friday’s rate of 1.0934.

Michael Brown, currency expert at Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures.

He said: “Sterling slid to its 2nd straight daily loss on Friday, as jitters over the post-Brexit trade talks, and potential for further coronavirus restrictions to hit the UK economy, both exerted pressure.

“It is those two factors that will likely be the primary drivers of the pound again this week, with any meaningful sterling appreciation likely to be capped in the short-term, until at least one of those uncertainties has been resolved.”

The UK’s departure from the EU is likely to continue impacting sterling moving forwards.

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Ranko Berich, Head of Market Analysis at Monex Europe on commented last week about the impact of a no-deal Brexit.

He said: “Sterling slid to its second straight daily loss on Friday, as jitters over the post-Brexit trade talks, and potential for further coronavirus restrictions to hit the UK economy, both exerted pressure.

“It is those two factors that will likely be the primary drivers of the pound again this week, with any meaningful sterling appreciation likely to be capped in the short-term, until at least one of those uncertainties has been resolved.”

The UK’s departure from the EU is likely to continue impacting sterling moving forwards.

Ranko Berich, Head of Market Analysis at Monex Europe commented last week about the impact of a no-deal Brexit.

He said: “The UK economy is enjoying a fairly solid economic upswing at the moment, but increasing anticipation of negative rates in financial markets, and now increasing discussion of the issue at the MPC, highlights the extent to which everyone knows the economy is not out of the woods just yet.

“With no-deal Brexit (now re-branded as an ‘Australia-style’ trade arrangement) once again looming as an economic risk, and global equilibrium interest rates in a seemingly inexorable decline, negative rates are increasingly being seen as a plausible outcome for the UK.

“Perhaps counter-intuitively, the fact that the UK economy is recovering faster than expected is not incompatible with the MPC eyeing negative rates.

“As the August Monetary Policy Report made clear, the MPC believes negative rates are best used during times when banks are less concerned about balance sheet risks – such as during a recovery. Sterling has taken another knock on the news, compounding woes from the latest rash of Brexit developments.

“As always, the safest assumption seems to be that if trade talks collapse and the UK heads for a disruptive end to the transition period, further losses will materialise for the pound.”

What does this mean for your holidays and travel money?

The Post Office is currently offering a rate of €1.0535 for more than £400, €1.0688 for over £500 or €1.0743 for over £1,000.

Before purchasing travel money, travellers should always check the exchange rate.

Currency expert and founder of Currensea, James Lynn told Express.co.ukthat travellers should try not to buy currency in advance if the rate looks good.

“Try not to judge and gamble on the FX market going one way or the other,” he said.

He added: “It’s a very hard market to judge.

“Rather than locking in something on a pre-paid card or getting currency in advance because the rate seems to be going one way or the other, it tends to be a far safer option just to use whatever rate there is at the time.

“Unless people have got a particular expertise in currency transactions, we would advise keeping those savings firmly in sterling until the time. Just in case that trip does get pushed back or cancelled.”

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