Pound euro exchange rate soars as Brexit deal hopes rise after UK flights banned by many

Pound to euro rate rises despite bans on travel from UK

Pound to euro exchange rate has been impacted by Brexit talks and the fallout from fresh coronavirus chaos in recent days. Yesterday, after falling earlier in the day, GBP rose rapidly. Reports emerged suggesting the UK had offered the EU a bigger slice of fishing quota in exchange for compromise in other areas.

The news came just hours after Boris Johnson insisted Britain would thrive in the event of a no-deal Brexit.

There were suggestions online that markets were flocking to buy Sterling with the belief that a trade deal is imminent.

Last week, the UK said the bloc must accept a 60 percent reduction for a trade deal to be signed.

While the UK has indicated it would be willing to accept a three-year transition period on fisheries, the EU is pushing for seven years.

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Both sides could strike a deal by meeting half-way and agreeing to phase in changes over a five-year period.

Failure to agree on a deal on goods trade would send shockwaves through financial markets, hurt European economies, snarl borders and disrupt supply chains.

Unless Mr Johnson can strike a trade deal with the EU in the next 10 days, the UK will cut ties with its biggest trading partner at 11pm on December 31 after four decades.

The pound’s rise yesterday also came after a raft of countries around the world announced they were banning UK flights in a bid to limit the spread of covid.

The pound is currently trading at 1.10966 against the euro, according to Bloomberg at the time of writing.

George Vessey UK Currency Strategist for Western Union Business Solutions, commented yesterday: “Monday morning market sentiment soured and safe-haven assets rose as a new strain of coronavirus discovered in the UK triggered flight bans and heightened concerns.”

He continued: “The new strain of COVID-19 is 70 percent more transmissible, raises the reproduction rate by between 0.4 and 0.7, and is ‘out of control’ according to UK Health Secretary Matt Hancock as Britain announced a new restriction level, Tier Four, on London and the surroundings.”

So what does all this mean for your holidays and travel money?

Post Office Travel is just one of many foreign currency providers.

The service is currently offering a rate of €1.0524 over £400, €1.0677 for over £500 or €1.0731 for over £1,000.

It’s important to be savvy about when you purchase your holiday money.

“Don’t wait till the last minute; don’t buy from the airport – but most importantly, never use a credit card to buy money,” Shon Alam, founder of currency exchange platform Bidwedge, told Express.co.uk.

“If you buy travel money on a credit card, the card company sees this as taking money off the card in cash, therefore it attracts a higher interest rate and an extra charge as with all card companies.

“It is also worth noting that with exchange services, credit card purchasing can – and does – charge a higher overall cost.”

Travellers booking holidays now must remember to factor in what their own Tier in the UK means for travel, what travel corridor quarantine restrictions are in place and whether UK flights are blocked when choosing a destination.

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