The pound is falling against both the euro and the dollar as the Conservatives lose their huge lead in the polls against Labour.
After a slight recovery over the weekend, the pound plummeted after the latest polls showed Theresa May’s advantage has narrowed.
As a result the pound is now the worst performing currency among the world’s top 20 currencies as the market opens this week.
Last week holidaymakers looked on in concern as the pound hit a month-low of €1.16194, as UK inflation jumped to 2.7%.
But this morning in sunk below the 1.16 mark, stooping to lows of €1.15986 to the pound.
The drop came as support for the Tory’s went from around 20 points to between 9 and 13.
As a result sterling dropped by around 0.25%, just three weeks before the General Election is set to take place on June 8.
Caxton FX Analysis, Alexandra Russell-Oliver, said: “Sterling has come under pressure this morning after the Conservative Party's lead in polls fell to as low as 9 points over the weekend.
“Given that a Tory victory had been largely priced in, a tighter race could see greater political uncertainty and sterling risk in the lead up to the elections.”
The current exchange rate is slightly higher at €1.16218 to the pound.
Alexandra added: “Sterling is trading just above 1.16 against the euro, around the rate's lowest levels in seven weeks. The euro has strengthened in part on speculation of a less dovish ECB.”
How will the UK’s General Election affect the price of YOUR summer holiday?
Speaking exclusively to the Daily Star Online Retail Director at No1 Currency, Simon Phillips, said: “For everyday Brits, the recovery of the pound has a long way to go before holidaying overseas becomes cheaper, but this is another overall positive for sterling.
"With this turnaround election taking place in just two weeks now is the time to be increasingly savvy when shopping for foreign currency.
“The pound could bounce back if Theresa May’s hold on the Conservative party and Brexit Britain becomes stronger. However, the strength of sterling remains liable to change.
“Always be sure to follow current affairs, as political events like the announcement of a General Election generally affect the strength of the pound.
“That way, if you follow the election and shop around, you’ll be able to find the best currency rates."
