Pound leaps against euro and dollar as Theresa May quits as PM but it’s now come crashing down
THE value of the pound leapt against the dollar and euro following Theresa May's resignation as Prime Minister this morning before crashing back down - but it's since started to recover.
At the time of writing, the value of £1 was worth €1.132 and US$1.269.
This compares to €1.131 and $1.266 at 8am this morning followed by midday highs of €1.135 and $1.271.
But its the rate against the dollar that seems to be recovering more strongly.
Ian Strafford Taylor, chief executive of currency firm FairFX, warns that the value of the pound is likely to continue to be unstable.
He said: “Theresa May’s announcement that she will step down as Conservative party leader as of June 7, sparking the search for a new Prime Minister, brings further uncertainty for the future of the UK and for the pound as the indecision over Brexit rumbles on."
He adds that the pound has taken a battering since the UK voted to leave the EU in June 2016.
Leading up to the referendum the pound was worth €1.3 and $1.47 - and these heights haven't been reached since then.
Mr Strafford Taylor said: “The referendum result back in June 2016 marked the start of a roller coaster journey for the pound, which has failed to return to its pre-Brexit rates since the decision to leave the EU was announced.
"Over the last three years, the lack of any concrete plans around Brexit has left the pound vulnerable to volatility.
“Economic and political uncertainty creates negativity and can cause a drop in confidence in the market, meaning that the pound can decrease in value accordingly."
Should you buy your holiday money now?
The stronger the pound's value, the more you'll get for your money.
But exchange rates are constantly changing and can go up and down because of any number of reasons.
To protect yourself against currency price changes, Money Saving Expert founder Martin Lewis recommends buying a bit of holiday money now and a bit before you go.
He said: "A simple way to guard against currency moves is buy some now, and some just before you go.
"This diminishes the impact of rate moves (good ones as well as bad)."
Exchange firms also all use different prices so use to compare rates.
And never buy currency at the airport or other ports - it will always cost more.
Another way to protect yourself from currency movements if to consider a specialist travel credit card, which allows you to spend money abroad without being hit by any fees or hidden charges.
For more on travel credit cards you can read our guide here.
Theresa May's decision to resign comes after her Cabinet deserted her and her Brexit plan failed.
Mrs May says she will stand down as Tory leader on June 7 but she will remain Prime Minister until a successor is chosen.
The leadership contest is expected to take around six weeks.
Any Tory MP can enter the race, and the list of contenders is then whittled down by the parliamentary party.
MPs vote in multiple rounds, eliminating one candidate each time until just two are left. The party's 120,000 activists then choose behind the final shortlist of two, with the winner declared leader and Prime Minister.
More on money
The news comes as the Tories face a near-total wipeout when the Euro election results are announced on Sunday night.
Meanwhile, Money Saving Expert founder Martin Lewis reveals whether you should buy holiday money now or wait until after Brexit.
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