Pound to euro exchange rate climbs after Sunak’s Budget
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Chancellor Rishi Sunak announced his latest Budget yesterday, explaining how the Government will provide support for people as the country’s third national lockdown eases in the upcoming months. News of his Budget did nothing to the pound, as it continues to hold position above the 1.15 mark against the euro.
The pound has risen only slightly since Rishi Sunak’s announcement yesterday, but still remains in the mid-1.15 range.
Yesterday morning, the pound was trading at a rate of 1.1551 against the euro according to Bloomberg.
Today, the pound currently stands at a rate of 1.1579, at the time of writing.
Michael Brown, currency expert at Caxton FX, spoke exclusively to Express.co.uk to give his insight on the currency exchange.
Mr Brown said: “Sterling-euro remains stubbornly rangebound in the mid-1.15s, with yesterday’s Budget having had practically no effect on the pound, and the market still looking for fresh impetus to determine its next direction.
“Today’s calendar is unlikely to provide that, given the rather barren nature of European-specific events, meaning another rangebound day could lie ahead for the cross,” he added.
Mr Brown yesterday predicted that Rishi Sunak’s news may not change the euro-sterling exchange rate.
He said: “One may assume that today’s Budget could be a market mover, and there is a possibility that it will be; however, past Budgets have never been a huge event for the FX space, and with so much appearing to have been leaked in advance, the majority of announcements are probably priced in already.”
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Additionally, the currency expert explained: “Sterling continues to tread water in the mid-1.15s, with the early part of the week having brought little for investors to get their teeth into.”
On Tuesday, George Vessey, UK currency strategist at Western Union Business Solutions, also shared his insight on the week’s pound to euro exchange.
Ahead of Mr Sunak’s announcement, he said that GBP investors were “unnerved” by the then approaching Budget news.
“The highlight anticipated UK Budget will be announced by Chancellor Rishi Sunak, with all eyes on how the government will support businesses and households through the pandemic whilst unveiling plans to balance public finances in the future,” he said.
Mr Vessey continued: “Sterling is sliding though, dogged by the threat of new virus variants and general risk appetite waning.
“Talk of tax increases is likely unnerving GBP investors too as a shift in fiscal strategy too soon could create an unnecessary headwind for the recovery.”
The currency strategist added: “GBP/EUR remains in the higher realms of the €1.15 zone for now.
“GBP/EUR has held firm above the €1.15 handle as a result, but as sterling is a risk-sensitive currency too and has benefited by the fast vaccine rollout in the UK, the pound’s gains could further unwind if risk aversion grips markets.
“GBP/EUR could sink back towards the €1.13 support level in this scenario.”
What does all this mean for travel money?
easyJet and Skyscanner have already reported a surge in bookings for the summer months after the Prime Minister suggested some international travel may go ahead from May if the Global Travel Taskforce deems it safe and possible.
In anticipation, some hopeful holidaymakers may be looking to take advantage of the current rates and swap money in advance.
However, James Lynn, co-CEO and co-founder of travel card Currensea, advised against this, saying: “Market movements are often more marginal in reality than they appear. Especially during this volatile time, it’s safer to keep hold of your money in your UK bank account than purchasing or exchanging for holiday money.”
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