Pound Euro Exchange Rate at 21 Month High | Prepaid365

Powered by PFS
8 July 2014

Tags: , , , ,

Holidaymakers and anyone else jetting off to Europe this summer can currently enjoy record exchange rates.

The pound is at a 21-month high against the Euro, meaning it’s possible to get more for your money before setting off on any European adventures.

Key to the current market exchange rate is the differing approaches taken by the Bank of England and the European Central Bank.

While the latter is fending off low inflation by keeping policies reasonable, the Bank of England is edging closer to tightening interest rates.

Currently that means the pound is being given a boost while the Euro is slowly being dragged down – providing a great opportunity for anyone off to Spain, Italy or Greece for their summer holidays.

Differing conversion rates

It’s also good news for anyone visiting other parts of Europe too, although converting any leftover Euros back to pounds may not provide such an exceptional rate of return.

The Euro is losing ground on the pound due to a lack of retail sales according to the latest figures, with several major European markets not performing to expectation.

Gains of 0.2% were predicted for the Eurozone, although this figure was negatively revised to -0.2%, mainly due to decreased food and drink spending.

The service sector in Germany did perform well but the manufacturing sector lost momentum, contributing to the weaker Euro.

The months ahead

Given the differing approaches of the two monetary powerhouses, a similar pattern is expected for the months ahead, so it might be best to hold off on converting any leftover Euros for the foreseeable future.

The Bank of England is expected to hike interest rates towards the end of this year or early into the next, so the situation could change when such a move occurs.

Expectation of such a move is already having an effect on the market, with the chance of the pound reaching an even greater high in the next month a distinct possibility.

Prepaid travel options

Travelling with a prepaid travel card can provide money to spend without the need to carry lots of travellers’ cheques or foreign currency.

With a prepaid card you can only spend the amount which is on it at any given time, making budget management possible, although it can be topped up if you so wish.

Additional security exists on these cards, while the exchange rate seen will be the one when the original transaction took place – providing protection should the exchange rate vary dramatically during a trip.

Comments are closed.

Want to find out more about corporate travel cards?

Get in touch