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The pound to euro exchange rate has suffered dramatic fluctuations in recent months, however new optimism that a Brexit deal could be struck soon has offered a positive boost for the pound. According to one expert, sterling is heading into the week “on the front foot”.
Michael Brown, currency expert at Caxton FX spoke exclusively to Express.co.uk and further revealed his belief that a deal between UK and EU leaders will be struck “this week or into December”.
The pound is currently trading at a rate of 1.1216 against the euro according to Bloomberg at the time of writing.
Mr Brown explained: “Sterling once more moved sideways against the euro on Friday, as the market remained in a state of Brexit purgatory, waiting for signs of white smoke from the UK-EU trade talks.
“The pound is, however, starting this week on the front foot, amid reports that a breakthrough may be imminent, though caution is required with nothing in EU negotiations being agreed until everything is.
“My base case remains that a deal will be struck, whether this week or into December.”
The UK has already agreed on a number of trade deals with countries outside of the EU, with negotiations between the UK and Canada said to be showing promise.
International Trade Secretary Liz Truss stated that “more advanced” trade negotiations would occur between the UK and Canada after January 1, 2021.
On Friday, the UK finalised a post-Brexit deal with Canada to protect the flow of goods and services worth £20billion.
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Though many Britons are not travelling at present, with hopes the travel ban may be due to end of December 2 in time for the festive season, a boost for the pound could be positive for those looking to exchange travel money.
However, with rules and regulations changing so rapidly in recent months, one expert suggests Britons should avoid switching all of their currency in one go.
An expert from Currency Online Group explained: “Excited holidaymakers exchange thousands of pounds every year, often months in advance of their trip.
“In normal times, this is usually sound advice as currency experts say it is best to convert half of your planned spending budget months before you travel and convert the other half closer to the time.
“This is to balance out any risk of the fluctuation in exchange rates, so you are not left out of pocket if the rate goes against you at the last minute.”
Even Britons whose holiday plans may have fallen flat amid the travel ban are warned not to hang on to any unused currency.
Instead, they should shop around to secure the best buy-back rate, and then exchange any unwanted travel money back into pounds.
“We advise our customers to sell it back to pounds and bank that cash.
“If you then need to exchange it in the future, you can do so,” advise the financial experts.
“When people have holidays cancelled or they come back from a trip with some currency left over, they will often put it away in a draw and forget about it,” added Paul Brewer, CEO of Currency Online Group.
“Sometimes they’ll think ‘I’ll use it next time’ but you’d be surprised how many people just simply forget it’s there after a while.”
Mr Brewer warned: “Even if you do plan to use it the future, the changing exchange rate means you could be losing out if the value of the currency falls dramatically.
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