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The pound to euro exchange rate has dropped marginally since yesterday as the second week of October nudges to a close. Sterling was “rangebound” against the euro, said experts, and did not break above highs seen in June. A “mixed bag of Brexit News” even failed to shift GBP.
Looking ahead at today, GDP data was released this morning which showed it remains below pre-covid level.
It was also announced the UK economy has bounced back from recession with 15 percent growth from July to September.
However, experts say these developments will be ignored by the market.
Politics and the Bank of England will remain in focus instead.
The pound is currently trading at 1.1212 against the euro, according to Bloomberg at the time of writing.
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.
“It was something of a rangebound day for the pound against the euro yesterday,” said Brown.
“The pair were largely unfazed by a mixed bag of Brexit news while failing to break above the June highs at the key 1.1280 resistance level.
“Looking ahead, this morning’s UK GDP data will be ignored by the market.
“Focus will remain on political developments and the Bank of England Governor’s remarks this afternoon.”
Earlier this week, the pound benefitted from a more positive feeling following news that Pfizer’s coronavirus vaccine candidate may be of more benefit to the UK – having it delivered first – compared to global peers.
George Vessey, currency strategist at Western Union, commented: “Global risk sentiment has been buoyed by vaccine hopes this week and the British Pound has really cheered the news.”
He continued: “The UK economy, which suffered one of the worst contractions out of the developed nations due to its reliance on the services sector, is likely to benefit considerably if a vaccine is successful.
“Currently in the middle of its second lockdown, the UK economy is also at risk of a huge shock in the event of a no-trade deal Brexit at the end of the year.
“However, comments by the UK government and EU officials lately have been positive, feeding hopes for a deal before year-end and avoiding disruptive barriers to trade in 2021.
“Boris Johnson’s defeat in the House of Lords to have the Brexit treaty edited with the Internal Market Bill also raised the chances of a soft Brexit.”
Vessey added: “Should the risk rally continue and Brexit optimism persist, sterling should extend higher.
“GBP/USD might have the $1.35 mark in its sights and GBP/EUR traders are eying the €1.15 level, though many resistance levels lie ahead.”
So what does this mean for your holidays and travel money?
Post Office Travel Money is currently offering a rate of €1.0822for over £400, €1.0979 for over £500 or €1.1035 for over £1,000.
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