The pound to euro exchange rocketed to its highest level in a month on Wednesday. The surge came amid indications the UK and European Union (EU) are finally on the cusp of clinching a post-Brexit trade deal. Sterling jumped one percent against the euro to 90.15 pence yesterday.
The pound is currently trading at 1.111 against the euro, according to Bloomberg at the time of writing.
“The market is anticipating that a deal will be agreed in the next day or two,” MUG strategist Lee Hardman said.
“The best-case scenario for the pound would be if we also see details released form the EU and UK side of things alongside the deal to try and reduce the initial disruption when we shift to a new trading arrangement.”
EU member states would still have to approve a provisional application of the deal with effect from January 1 as time has run out for the European Parliament to ratify it, a senior EU diplomat told Reuters.
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Three diplomatic sources told Reuters the bloc’s member states have started to prepare their procedure to implement any deal from the start of next year.
On Wednesday, Cabinet minister Robert Jenrick said he is “reasonably optimistic” that a deal can be struck before the end of the transition period on December 31.
But he warned “serious areas of disagreement” remain on fishing and the level playing field measures aimed at preventing unfair competition on standards and state subsidies.
Jenrick told Sky News: “We are working through those issues, our negotiators will keep going – the Prime Minister has been very clear that he is going to negotiate until the very end, which is December 31, because that is the right thing, it is what the British public would expect.
“But at the moment there isn’t sufficient progress, it isn’t a deal that the Prime Minister feels he can sign us up to because it doesn’t yet respect us, in full, as a sovereign, independent nation.”
French Europe minister Clement Beaune had warned the EU should not put itself under pressure to agree a trade deal with the UK at the eleventh hour.
He claimed a no-deal outcome would be “catastrophic” for Britain and suggested the EU should hold out.
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 €1.0614 over £400, €1.0769 for over £500 or €1.0824 for over £1,000.
This means you can get more bang for your buck today than you could earlier in the week thanks to the more favourable exchange rate.
Hamish Muress, currency expert at international payments company OFX, shared his travel advice and top tips for Britons trying to keep track of currency.
“You need to stay on top of exchange rates to understand how far your money will go overseas,” Muress told Express.co.uk.
“It’s important to know where you stand, but you don’t have to watch the markets yourself.”
Some currency specialists, including OFX, let customers sign up to daily market commentary and exchange rate updates.
What’s more, it may be worth speaking to a currency expert to understand how the pound is performing and get a sense of what might happen next.