Pound to euro exchange rate – Sterling slips yet again after seven-month high
Weak data from the construction sector said to have contributed to falling pound
THE Sterling slipped against the Euro on Friday, hit by weak data from Britain's construction sector.
The pound, which hit a seven-month high during January, was trading at 1.1381 euros at 11.10am - down by 0.19 per cent from the same time yesterday.
What has happened to the exchange rate today?
Why has the sterling fallen against the euro?
In January 2018, Britain's construction sector came close to contracting for the first time since September, with orders drying up due to uncertainty linked to Brexit.
Sterling slipped to the day's low of $1.4210 and was 0.2 per cent weaker against the euro, at 87.82p.
"The PMI construction data today certainly could have had an impact... but I'm wondering if there could be a reassessment going on in sterling," Rabobank currency strategist Jane Foley said.
For the week, sterling was still up almost half a per cent against the dollar with analysts saying the currency is being supported by a repricing of Bank of England interest rate hike expectations.
What has happened to the pound in the last few months?
Sterling has been helped in recent weeks by a lack of major bad news around Brexit, analysts say.
The pound had dipped to under 1.08 euros last August but has made steady gains since and peaked at 1.15 on February 1, 2018 - the highest in seven months.
It was the strongest the pound has been since hitting 1.16 euros on June 8, 2017.
The pound was labelled the best performing currency of 2017 and it had a flying start to 2018 and looks set to surge to higher levels.
Analysts said Sterling has been sold off this week as some traders could not resist cashing in on recent strong gains.
Sterling is up one per cent since the beginning of the year.
How is Brexit affecting currency rates?
There is continuing uncertainty over the economy despite stronger than expected GDP growth figures announced on Friday.
But hopes that the UK will soon agree a Brexit transition deal with Brussels have contributed to the currency’s strong performance.
Michael Hewson, chief analyst at CMC Markets, said the only event that could send the sterling plummeting if talks with the EU broke down completely, which he said did not look likely as Brussels looked more amenable to negotiating with Britain.
Towards the end of last year, sterling enjoyed a slight surge as the first phase of the Brexit talks were concluded.
Both the UK and the EU’s remaining 27 member states will face "substantial losses" without a deal on Brexit, according to a recent report.
Europe would be clobbered by 1.2million job losses if no agreement were reached, while Britain would take a 4.5 per cent hit to GDP, according to the Centre for Economic Policy Research.
How to get the best holiday money rate
WE spoke with Hannah Maundrell, editor-in-chief at money.co.uk to find out how you can guarantee the best rate when you go on holiday
- Don’t buy cash at the airport – you’ll always be able to beat the rate with a bit of forward planning
- Compare travel money companies online – Factor in delivery costs and choose the option that gives you the most cash to spend on holiday. If you’ve left it until the last minute order online for airport collection so you get the best of both worlds.
- Use comparison tools – MoneySavingExpert’s TravelMoneyMax enables you to compare pick-up and pre-order rates.
- Don’t pay for travel money with a credit card – it’s likely you’ll be charged a cash withdrawal fee which adds to the cost.
- Top up a prepaid card to lock in your rate now – Choose your card and read the T&Cs carefully as some apply hefty fees. WeSwap, FairFX and Caxton FX are all worth checking out.
- Always choose to pay in the local currency rather than sterling – This will help you avoid sneaky exchange fees
Where is the best place to get euros?
Euros can be bought at supermarkets, the Post Office and currency specialists – but rates vary massively.
The best rates can often be found at specialist online outlets, such as Travelex, which will deliver your cash directly to your home.
Alternatively, FairFX offers currency cards which you can load up with sterling and then spend abroad like a debit card.
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Travellers can use comparison sites, like MoneySavingExpert's TravelMoneyMax, to find the best rate.
If you order in advance and pick up the cash then you’ll most likely get a better rate than if you walk in.
You can also buy last-minute currency at the airport, but it's almost always much cheaper to buy your currency before you get to the airport.
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