The pound to euro exchange rate enjoyed a mini surge this week, in good news for travellers, yet experts have forecast GBP remains “vulnerable”. Currency analysts insist sterling remains at the mercy of UK political developments, with voting for the new Conservative Party leadership and consequent UK Prime Minister starting today. This will run until around July 22 - so politics has plenty of time to impact exchange rates though the summer, meaning holidaymakers should stay vigilant. The pound is currently trading at 1.123 against the euro, according to Bloomberg, at the time of writing.
Michael Brown, currency expert at Caxton FX, spoke to Express.co.uk about the precarious situation.
He said: “Sterling closed broadly unchanged against the euro on Wednesday, with a lack of major economic releases from either side of the pairing resulting in an absence of volatility.
“Despite a brief surge after Conservative leadership favourite Boris Johnson indicated that a no-deal Brexit would not be his preferred outcome, the pound’s gains were short-lived as sterling retraced after a motion to rule out a no-deal Brexit was defeated in Parliament.
“Today, the economic calendar remains sparsely populated meaning markets are likely to continue being driven by ongoing political uncertainties in the UK.
“Despite firming recently, the pound remains vulnerable to downside moves should a no-deal exit from the EU become a more likely outcome.”