The pound to euro exchange rate has shown very minimal movement today as the news broke that the Brexit deadline date has been pushed back once again. Experts have warned the increased uncertainty could make GBP “vulnerable to volatility.” The EU has granted the UK an extension to the Halloween date of 31 October 2019. The lack of shift suggests the market was well prepared for the announcement of the delayed date. This new October date comes after a compromise between France who wanted a short extension and Germany who backed a longer one.
The pound is currently trading at €1.160 against the euro, according to Bloomberg at the time of writing.
Ian Strafford-Taylor, CEO of currency expert, FairFX said: “The second extension to Article 50 means we have avoided crashing out with a no-deal Brexit which could have been very damaging for the pound.”
“However, the pound has been on a rollercoaster journey against the euro since the referendum back in 2016, and the continued uncertainty that comes with this extension means the pound is still very much vulnerable to volatility.”
“Since the start of the year we’ve seen the pound fluctuate almost 7 per cent against the euro, compared to the day of the referendum it’s still down nearly 11 per cent which means holidaymakers heading off over Easter will now get £122 less worth of euros for every £1,00 they exchange.”
May told journalists following the latest Brexit news: “What we have agreed tonight means that we can leave the European Union before June 30.
“What we need is to ensure that we have an agreement in parliament, that we can get through the necessary legislation to enable us to leave. This decision enables us to do that.”
Meanwhile, EU Council President Donald Tusk said: “This extension is as flexible as I expected, and a little bit shorter than I expected, but it’s still enough to find the best possible solution.”
However, he also uttered a warning to the UK, requesting: “Please do not waste this time.”
May is said to believe this is a “pretty good outcome” as long as Brussels is lenient with the conditions imposed on Britain.
Yesterday, the pound was supported today by a better-than-expected GDP figure.
The British economy grew by 0.2 per cent in February from January, according to data from the Office of National Statistics.
Over the three months to February, the economy grew by 0.3 per cent.
Further data revealed that both UK manufacturing production and industrial production rose in February.
Britons heading on holiday should also protect themselves against possible rising spending costs. Nick England, CEO at EasyFX said: “With the Brexit outcome still unclear, Brits travelling abroad this Easter could be faced with a more expensive holiday than they bargained for.
“As the value of the pound continues to follow the same ups and downs of the Brexit debate, those that leave converting their currency until the airport’s bureau de change risk negatively impacting their spending money.
“Holidaymakers really should take a smarter approach to their cash… By buying half of their spending money now and half later, travellers can both capitalise on Sterling volatility, and protect themselves against any potential crashes from a no-deal Brexit.”
The Post Office is currently offering a pound to euro exchange rate of €1.1242 for over £400 and €1.1370 for over £1000.
Brexit has been shown to have played havoc with holidaymakers’ plans, with the lack of a deal signed on the dotted line prompting a huge shift in British traveller’s vacation habits – with a fifth abandoning holiday plans altogether. A new survey by emerchantpay shows 19 per cent of Britons have altered their holiday plans as a result of ongoing uncertainty.
Commenting on implications for Brits travelling abroad and their currency exchange rates as a result of the Brexit extension, Louis Bridger, Head of ICE (International Currency Exchange), said: “While this decision will give the Prime Minister more time to plan and implement a deal, unfortunately the delay will likely cause more uncertainty for Brits travelling abroad. Every time there has been added Brexit turbulence, it hasn’t been good news for the strength of sterling.
“A weaker Pound would, of course, mean more expensive holidays for Brits but our message to travellers is ‘don’t panic’. If you’re already planning to travel over the coming months, you can hedge your bets and get some currency now and some later.
“Just make sure that you’re savvy about the method you choose to get your currency – plan ahead and get your currency online, rather than leaving it to the airport. Prepaid cards are also a great way to secure a rate without having to sit on cash.”