The pound is being buoyed by Brexit optimism as hopes swell that a deal is on the horizon.
Analysts believe a Brexit deal would spark a substantial rally in the pound.
James Athey, Money Manager at Aberdeen Standard Investments said: “A deal would mean the next two years would be under EU-equivalent conditions. It has the potential to trigger the sharpest appreciation in a long time.”
Brexit news has helped sterling “retain the upper hand” against the dollar and the euro, said Laura Parsons, currency analyst at TorFX.
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The pound is currently trading at €1.148 against the euro, according to Bloomberg.
“The GBP/EUR exchange rate briefly nosed above €1.150 as the week drew to a close despite some disappointing UK housing data,” said Parsons.
“If today’s growth data impresses the pound could end the week on a high, but a sub-par result might see Sterling retrace its recent steps.”
The increase in value against the euro came earlier this week as Brexit Secretary Dominic Raab, 44, responded with a “thumbs up” when quizzed about the outcome of a crucial Brexit cabinet meeting at Downing Street.
Raab and other cabinet Brexit supporters are believed to be supporting the plan to quit any proposed Irish backstop with a few months notice.
Germany’s latest trade balance was published yesterday by German statistics agency Destatis.
The data showed German exports took a sizeable hit at the end of the third quarter, contracting 0.8 per cent and missing expectations of a 0.3 per cent rise, as global trade tensions appeared to diminish demand.
Pound to euro exchange rate: Brexit news triggers GBP ‘sharp appreciation’ – sterling soars (Image: Getty Images)
Carsten Brzeski, Chief Economist ING Germany explained: “The trade data ends a disappointing week for German industry. Available monthly data suggests that the economy had its worst quarterly performance in 3Q since the beginning of 2015.”
Looking ahead to today, GBP/EUR exchange rates could test the waters of €1.15, following the publication of the UK’s latest GDP figures.
Economists forecast Friday’s data will show a marked rise in UK economic growth in the third quarter, with GDP expected to rise from 0.4 per cent to 0.6 per cent as the warmer weather over the summer helped to spur consumers to spend more.
Meanwhile, a lull in Eurozone data may leave the euro vulnerable to further losses, especially if markets remain bearish towards the single currency.
Holidaymakers heading abroad should make sure they’re getting the best value for their money.
Rather than turning up at the post office the week of your trip or at the currency exchange bureau at the airport, the best travel advice is that travellers should consider monitoring the financial situation throughout the year.
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Pound to euro exchange rate: The pound is currently trading at €1.148 against the euro (Image: Bloomberg)
Pound to euro exchange rate: Holidaymakers should make sure they’re getting the best value for money (Image: Getty Images)
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Research from Forex Educator, Learn to Trade in partnership with YouGov calls for Brits to keep a closer eye on the potential impact of current affairs on the forex and currency markets in order to get the best deal on their holiday money.
“The currency market is incredibly volatile,” said James Mathews, CEO of Learn to Trade.
“Values can rise and fall with little warning. By not watching how currency rates are fluctuating on a regular basis you could be missing a trick.
“Those tiny percentage point differences may not mean a lot to you on a first glance, but a single point change could mean the difference of £50!”
A huge 55 per cent of Britons buy their travel money between a day in advance and once they’ve arrived abroad while just nine per cent buy foreign currency throughout the year watching the market for a ‘good’ exchange rate.