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Euro fall
Does the fall in the euro mean it's time to go on holiday to Europe – or even buy property? Photograph: Roman Koksarov/AP
Does the fall in the euro mean it's time to go on holiday to Europe – or even buy property? Photograph: Roman Koksarov/AP

What does the fall in the euro mean for you and your summer holidays?

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Syriza’s success in Greece has pushed the euro down, but it’s still nowhere near as weak as it was a decade ago

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Syriza’s success in the Greek elections has sent the euro to new lows, with the pound now worth €1.337 in early trading, compared to €1.25 as recently as eight weeks ago. But what does this mean for you – and your summer holidays?

Does this mean cheap holidays this summer?

As recently as summer 2013 it would have cost you around £440 to buy €500 to take on holiday, with commission eating up another chunk of your cash too. Now that €500 costs just £375 to buy. In other words, your spending costs in holiday destinations around Europe will be 15% cheaper this year than 2013, and about 7% less than in 2014.

I’m heading to Florida. Is this good news for me too?

Not at all. The dollar has been the main beneficiary of euro weakness and has gone up sharply against sterling as well. In July 2014 visitors to the US got $1.71 for each pound they exchanged, now they will get just $1.51, a fall of 12%, making visits to the States the priciest for four years.

Can I lock in to these euro rates?

Pre-paid currency cards are the main way tourists can lock into exchange rates before they travel. There are now hundreds on the market; moneysavingexpert currently recommends a card from Ukash if you’re loading less than £500, with FairFX and CaxtonFX better for larger sums.

Should I lock in at these rates?

That’s the €1m question. Whenever central banks use quantitative easing (the ECB has just announced a €1tn programme), conventional wisdom is that the currency falls and maybe the euro still has some way to fall. But others argue that with QE expected by the markets, it’s now largely in the price.

Although the euro is weak, it’s nowhere near as weak as it was a decade ago. In 2004, sterling briefly fetched €1.5, and for long periods of time before the financial crash £1 would buy €1.4. Today’s rate of around €1.33 is only good compared with recent history, when the Bank of England let the pound slide at the start of the financial crisis.

Is this a good time to buy a property abroad?

For the well off, maybe so. A €100,000 flat in Spain cost £90,000 to buy in sterling two years ago, but now costs just £75,000. QE tends to push up house prices, so buying now could be a moneyspinner.

Are there any other advantages to the euro’s fall?

For years, the cross-border shopping traffic in Ireland has been one way, with Dubliners heading to Belfast for bargains. But now the euro has fallen so much, the “rip off Republic” is beginning to look better value.

Petrol, for example, now costs 94p a litre south of the border, compared with £1.05 in the north.

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