British holidaymakers have been dealt another blow, after being warned to buy their travel money for holidays later in the year now.
This is because the pound is unlikely to get any stronger for the rest of the year, a forecaster warned.
The caution was given by Nick Parsons, a senior writer at foreign exchange firm Ofx.
At a forum on Brexit, organised by the ABTA, Parsons said: “The pound is about as good as it gets. Forward buy some of your currency needs. The economic background is going to be challenging for the UK economy and the travel industry.”
He also warned that the “pace of growth we’re going to see over the next few years will be dismal”.
However, Express.co.uk reported that the pound has boosted today. Latest Bloomberg figures report the GBP/EUR exchange rate to be 1.1455 compared with yesterday’s figures of 1.1421.
In a response to Parsons’ forecast, other currency experts have advised that there’s no way of knowing what the future holds for the pound.
Therefore, a sensible decision would be to split your money, buying some now and some later on in the year.
Alexandra Russell-Oliver at Caxton FX commented: “Holidaymakers planning to travel in the Eurozone are looking at the best euro rate in two months, while the dollar rate is at its highest levels since 2 February.
“Sterling has strengthened this week after the transition period agreement eased some Brexit uncertainties and UK wage and Retail Sales data came in better than expected.
“However, Brexit negotiations will continue to pose a risk to the pound over the coming months,” Russell-Oliver continues.
“For holidaymakers uncertain about whether to buy travel money now or wait, one option is to hedge your bets, purchasing half of your currency requirement now, and half later.
“That way, you will benefit from the higher exchange rate on at least half of your currency. Either way, purchasing holiday money in advance, such as through a pre-paid card like Caxton’s, means you will know exactly how much you have to spend and can avoid paying airport rates.”
However, the pound has weakened against the euro since last year, meaning Brits are losing out when changing their hard earned cash for holiday money.
Those holidaying in Eurozone destinations this year can expect to have almost £20 less in euros, based on a £500 currency transaction, Post Office Travel Money revealed.
As a result, Brits are looking for alternatives to make their money go further – either closer to home in the UK, or further afield to long haul destinations.
Long haul destinations of choice include ‘dollar destinations’ such as the USA and Caribbean, as well as Eastern Mediterranean destinations such as Turkey, where the lira has halved in value against the sterling in the past five years.
