Travel: Richard Madeley questions the 'point' of list system
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The pound struggled to gain momentum earlier this week due to it hitting a two month low last week. However, it finally increased past the 1.16 mark against the euro yesterday and continues to rise.
Sterling performed well yesterday despite changes to the UK travel traffic light system.
After a government meeting, it was announced yesterday afternoon that Portugal will be moved from the green list to the amber list.
However, this did not affect the pound’s movement against the euro.
Sterling is currently trading at a rate of 1.1642 against the euro, according to Bloomberg at the time of writing.
This is slightly higher than yesterday’s rate when the pound was trading at a rate of 1.1607.
According to Michael Brown, currency expert at Caxton FX, attention will now be focused on whether the pound will further increase in value today.
He told Express.co.uk this morning: “Sterling strengthened slightly against the euro yesterday, despite news of tighter international travel restrictions in the UK, with the cross benefiting from broad USD demand dragging the common currency lower.
“There is a sparse data calendar due on both sides of the Channel today, hence attention will be on whether yesterday’s gains can be consolidated or even extended into the weekend.”
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This is positive news compared to yesterday morning, as Mr Brown had predicted “a quiet day” for the pound.
He said yesterday: “Unfortunately the low volatility and tight ranges with which we have become far too familiar of late persisted yesterday, with the cross continuing to chop just a handful of points either side of the 1.16 mark.
“Today’s final PMI surveys are unlikely to bother market participants too much, meaning that another quiet day could lie ahead.”
George Vessey, UK currency strategist at Western Business Solutions, also gave his insight on the pound to euro exchange rate yesterday.
Mr Vessey explained that “unpredictable” moves in currency markets should be expected due to the ongoing coronavirus pandemic
He said: “The British pound fell from three-year peaks yesterday as traders took profit on the recent rally helped by the ongoing reopening efforts and the rapid pace of vaccinations.
“The pullback was largely expected as investors weighed the possibility of a delay to the final phase of the UK reopening.
“As it stands, UK economic conditions have been improving vastly and the latest forecast from the OECD showed the UK economy is expected to expand 7.2 percent this year, which would make it the fastest growth in circa 80 years and the fastest among developed countries.”
Mr Vessey added: “Sterling has outperformed many currency peers this year as a result and May was no exception. For example, GBP/JPY is over 10 percent higher year-to-date, strengthened three percent last month and notched a new three-year peak.
“Despite the setback for sterling this week, the well know adage of ‘trend is your friend’ is still intact when analysing charts of a longer timeframe. However, given the uncertainty about the Indian variant and potential for future lockdowns, unpredictable moves in currency markets should be expected.”
So, what does all this mean for your travel money?
After changes were made to the green, amber, and red lists yesterday, Britons are being urged to be even more cautious when it comes to travelling abroad.
If travelling to a country on the green list, holidaymakers will not have to quarantine, but travel money experts are still warning customers that “preparation is key” when it comes to exchanging money before leaving the UK.
James Andrews, senior personal finance editor at Money.co.uk, said: “Once there has been an official green light given on our planned summer trips, there are ways to ensure you can stretch your summer spending money as far as possible by sticking to the following tips.
“Do not exchange your money last minute at the airport, the rates are generally much less favourable than online or high-street alternatives, so preparation is key.
“If you find yourself acting on impulse, booking a last-minute break and needing to collect your euros upon your departure date, try to order them for collection in advance of your travel dates to take advantage of the best possible rates.
“For the best rates, take out a travel money card now. It doesn’t fully replace having currency in hand when you land, but once there you can use these at no cost for spending or withdrawing from a cash machine.”
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