Pound to euro exchange rate: GBP soars to five-week high – Brexit ‘soft deadline’ extended

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Many Britons may be uneasy about jetting off abroad in the current climate, but for those who are still anticipating European travelling the coming weeks, travel money is likely on their mind. The pound to euro exchange rate has been turbulent in recent months, thanks to the ongoing pandemic coupled with the looming Brexit deadline.

Trade talks are continuing to rage on between UK and EU officials, following the decision to extend the “soft deadline” Prime Minister Boris Johnson had initially set out for a resolution to be made.

It had been hoped a deal, or no-deal would be decided on by the end of October in order to ratify any decisions.

However, reports now suggest that the PM has been advised to stay in talks.

As a result, the pound has managed to claw back some strength after a “choppy” trading day previously.

The pound is currently trading at a rate of 1.1068 against the euro according to Bloomberg at the time of writing.

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

“Sterling rose to a 5-week high against the euro yesterday, finally breaking to the upside of the recent trading range, as the market reacted positively to reports that today’s ‘soft’ deadline for post-Brexit trade talks would be extended, and priced out the chances of an immediate cliff-edge,” he said.

“Today, the EU Council summit will be the main focus for sterling traders, where all eyes will be on the tone struck surrounding Brexit, and whether talks intensify over the coming weeks.”

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George Vessey, currency strategist at Western Union believes that Brexit has been a major deciding factor for traders in recent weeks.

He explained: “The British Pound has been more sensitive to Brexit-related news recently and its U-turn this week came after pessimism from both sides in relation to the progress made in trade negotiations.

“No-deal fears crept higher and sterling fell lower across the board, falling 1 percent against the US Dollar on the day and losing grip of the $1.30 and €1.10 support levels against the dollar and Euro respectively.

“Ahead of entering the final intense phase of negotiations, the EU is demanding more concessions, whilst UK PM Boris Johnson continues to threaten walking away if enough progress hasn’t been made by tomorrow’s EU summit.”

Key areas of concern currently ruling Brexit talks include fisheries and governance.

“The well-known sticking points are fisheries, level playing field issues and governance,” continued Mr Vessey.

“The realisation that a deal this week was unlikely gave investors a scare, especially because of Mr Johnson’s self-imposed deadline.

“Will the PM risk losing face and losing the support of his anti-EU wing of his own party if he does make concessions?

“It would certainly boost hopes for a deal and boost the pound, but the political repercussions might be too damaging.

“For this reason, a no-trade deal scenario is still possible and GBP downside risk is potentially under-priced.

He added: “GBP/EUR could fall back towards €1.07.”

Though it can be hard to determine when the best rates will arise, there is one way to lock them in if you do happen upon a satisfactory opportunity.

Travel money cards allow customers to maintain the exchange rate at the time of purchase.

They can then be used much like a debit card but without the risk of unexpected international fees.

One big-name travel money specialist who offers these cards is the Post Office.

The Post Office is currently offering a rate of 1.0587 for amounts over £400 and 1.0796 for amounts over £1,000.

A spokesperson for the UK company also pointed out they can offer an added bonus during these times of travel uncertainty.

“Travel Money Card customers who remain abroad or unable to get back to the UK during the pandemic can continue to load their Post Office Travel Money Card with the foreign currency and then withdraw cash from ATMs where the Mastercard Acceptance Mark is displayed in that country to help with day to day expenses,” they said.

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