Pound to euro exchange rate – sterling stays steady against the European single currency amid Davos 2018
Sterling was trading at 1.1446 against the Euro at 2:30pm on Friday afternoon, with the British currency's uplifting performance set to continue
STERLING continues to hold steady against the Euro as Davos rumbles on, trading at 1.1487 at 2:30pm on Friday.
The European Central Bank met yesterday, with Mario Draghi, the ECB president, saying that whilst inflation was on track, there would be few chances for an interest rate hike.
The British Pound was labelled the best performing currency of 2017.
Sterling has had a flying start to 2018 and looks set to surge into higher levels.
Hopes that Britain will soon agree a transition deal with Brussels supporting sterling have also contributed to the currency’s strong performance.
"I expect the political noise to move the pound on a short-term basis.
“But will it change the overall direction of the last 12 months? I don't think so," said Michael Hewson, chief analyst at CMC Markets, who remains bullish on the pound.
Hewson said the only event that could send sterling sharply lower was 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.
With the value of currency so closely linked to the outcome of the UK’s departure talks, all eyes will remain firmly fixed on the remaining Brussels negotiations – with the toughest part, the trade talks, still to come.
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.
What has happened to the euro conversion rate in the last few months?
Sterling is down around 13 per cent against the euro and 11 per cent against the dollar compared with before the EU Referendum of June 2016.
For investors, a rate hike is good news, as it means the pound gains more value while it’s sat in buyers’ bank accounts.
A rise in interest rates can also reflect an increase in general economic confidence, which will increase sterling’s relative value on financial markets.
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.
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
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