The pound to euro exchange rate has decreased despite the odds of a no-deal Brexit slimming, experts have said. On Tuesday, after a day of debate concerning different amendments to the Withdrawal Agreement originally proposed by Prime Minister Theresa May, MPs supported a new approach to reopen the agreement and replace the backstop with “alternative arrangements.” However, May was immediately turned down by Brussels, where European Council president Donald Tusk insisted that the Withdrawal Agreement struck last November was not open for renegotiation. This turn of events saw the pound shaken and plunging as low as €1.1422 – but it managed to recover slightly on Wednesday.
The pound is currently trading at €1.145 against the euro, according to Bloomberg at the time of writing.
Laura Parsons, currency analyst at TorFX, spoke to Express.co.uk regarding the latest exchange rate figures.
“The GBP/EUR exchange rate slid after MPs voted in favour of re-opening negotiations over the Irish border issue on Tuesday,” she said.
“The pound dropped back to €1.143 and held losses despite the odds of a no-deal Brexit receding.
“The GBP/EUR exchange rate also failed to capitalise on a contraction in German inflation.
“However, if today’s run of Eurozone data (including German unemployment and Eurozone GDP) fails to impress, Sterling might just edge higher over the course of the day.”
Brexit will continue to provide a background of much uncertainty for the pound in the coming months, with the currency remaining unstable, experts caution.
Tyler Griffin, currency specialist at OFX, said: “We expect much volatility between now and the next key vote on 13th/14th February, and in the short term there will be major pressure on the pound, especially against the US Dollar.
“One more slip from Theresa May and we could see the pound hit the deck and fall back below 1.30 against the dollar.”
Holidaymakers are urged to be savvy when it comes to buying holiday money and keep an eye on the market to make sure they are not losing out.
“All travel experts will tell you that, when it comes to travel money, it pays to be prepared,” Greg Baggio, Head of FX at WeSwap said.
“This doesn’t just mean taking advantage of the best rates in advance of your trip. Events such as the political scrutiny of Theresa May’s Brexit Plan B can have a massive impact on the exchange rate, particularly when they concern the economy and public spending.
“Despite performing at a twelve month high last week, the pound has plummeted amidst this political uncertainty. In order for holidaymakers to ensure they get the best exchange rates, they should be aware of these important dates and plan when they buy their holiday money accordingly.
“WeSwap’s research has found that nearly half of all Brits find and buy their foreign currency in the space of one day, leaving them vulnerable to forces beyond their control that dictate the strength of the pound.
“When shopping across travel money providers, UK travellers should also shop across a period of time for a stronger rate. Without the use of technology that allows users to set their desired exchange rate, holidaymakers are left watching the exchange rate move up and down.
“With increases to Air Passenger Duty looming this April, along with the uncertainty surrounding how leaving the EU will affect our holiday plans, we simply cannot afford to buy our foreign currency in the space of one day as it will leave us susceptible to losses to the tune of hundreds.”