Should I buy euros now while the exchange rate is good?

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Should I buy euros now while the exchange rate is good?

If you have already booked your holiday in Europe, then you could consider buying some of your euros now.

Following Brexit Day on the 31st of January a few days of uncertainty around negotiations saw an initial positive impact on the pound against the euro. However, over the past weeks it has seen a couple of surges and plummets showing there is still uncertainty whilst we are in a transition period. Recent research shows that some of the non-euro currencies are weaker than in summer 2019 but the euro is now up by over 10% compared to August 2019, meaning now is a good time to buy at least some of your travel money for the summer.    

Post-Brexit travellers should look forward to less drama with the transition period avoiding any disruption at passport control.  Warnings were issued last year around potential restrictions for foreign travel in the event that the UK left without an agreement. However, rules on passport validity, EHIC healthcare and permits for driving abroad will remain the same until at least the end of the Brexit transition period in December.

Many holidaymakers seeking winter sun in locations such as South Africa can benefit from seeing more South African rand than they would have a year ago and new research shows that currently Turkey is the destination that offers the most value  for holidaymakers as the pound is worth around 19% more against the Turkish Lira than it was a year ago.

Anthony Rice, CEO at foreign exchange company Fourex explains that “The value of the Pound has been under a significant period of pressure since the referendum result however the end of 2019 and the start of this year has provided some improving stability with our exit from the European Union not yet having a significant effect.

On that basis, now looks like a good time to buy currency for travel later this year, locking in that value as we’re not sure what to expect as we continue through this transition period”

The pound continues to hold its ground now we are post-Brexit – but will it last?

With US Dollars and Euros being at the top when it comes to the most traded currencies, people would be wise to begin thinking about their travel plans for 2020. There are always questions when it comes to purchasing travel money, do I buy my travel money in advance? Do I wait to see if the value of the pound will increase, how do I get the best rates when buying my holiday money?

When there is uncertainty around where the rates will sit there is always the option to hedge your bets and purchase half your travel money in advance whilst the rates are looking strong, that way if the pound does continue to strengthen you will still benefit from the better rates it’s time to travel.

Update

Since this article was written the coronavirus pandemic has caused chaos to people’s plans to take a holiday and travel abroad. Brexit, which had caused so much anxiety in the foreign exchange markets got fixed then coronavirus came along! However, the euro exchange rate has held steady since the end of May despite falling demand. It’s always hard to predict what might happen but I think the message is always the same. If you think the exchange rate is good ahead of your travel, you could buy some of your currency then and the rest when you travel. That way if the rate gets better you will get some at the better rate and if it falls you will have already brought some at the better rate.

If you want to make a judgement on the exchange rate you can check out our euro exchange rate history page or sign up to our monthly newsletter for up to date information on currency movements.

Posted by Graham Morley

Graham Morley

Graham is the Business Development Manager for Compare Holiday Money.

4 Comments

  • Avatar Farzana Jamil says:

    Excellent,
    What about in new senaru after spreading Covid-19 in whole world. Should I buy some euros at this time. Planning a europe tour in summer in 2021.

  • Graham Morley Graham Morley says:

    Hi Farzana
    Thanks for your comment. You are asking a very good question and I’m sure one that other people are asking themselves. I have updated the article today and hopefully it will help to answer your question. Have a great European trip in 2021!

  • Avatar Pieter Aben says:

    I remember in my lifetime the rate to DM and Dutch guilders was 8:1 and 9:1 respectively. Both still trade to euros for 1.95 and 2.20 meaning a pound sterling used to be worth roughly 4 euros. You have lost three quarters of your wealth within a single generation. The pound continues to hold its ground, are you having a laugh

  • Graham Morley Graham Morley says:

    Thank you for that insight Pieter!

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