Among the many people affected by the falling pound during 2016 have been holidaymakers, who have increasingly found their sterling hasn’t gone as far as it once did. However, the pound has hit a relative high against the euro in recent weeks, particularly following the referendum vote in Italy. Whilst a far cry from the rate of €1.36 seen at the start of the year, Sterling has recently reached €1.19 which is considerably better than the low of €1.11 seen straight after the Brexit vote.
Looking to 2017, there are a number of likely events which will almost certainly have a negative impact on the pound, not least Prime Minister Theresa May’s plan to trigger Article 50 by the end of March. With this in mind, many are seeing the current exchange rate as a window of opportunity to get as many euros to the pound as they can before Sterling takes a further hit.
However, there are also a number of events which mean that buying currency now could result in missing out on further strengthening of the pound. As the euro weakened following the Italian referendum, the planned parliamentary elections in Germany, France and the Netherlands next year could have the same effect. Ultimately, it’s down to each individual to decide whether they want to buy now at a point of relative strength or hold out for potentially better rates next year.
Either way, there are a couple of things you can do to ensure you don’t end up out of pocket. Buyback guarantees offered by some foreign exchange companies mean that they will buy any unused currency from you at the same rate at which you bought it from them for a flat fee. Whilst this is intended for travellers with excess money after their trip, it can also protect you from uncertainty, ensuring you don’t lose out following a sudden shift in exchange rates.
It’s also worth knowing and making use of your cancellation rights. Purchasing your currency in advance means you will have that exchange rate locked even if the pound weakens after your order is placed. Equally, if the pound strengthens after you order, simply cancel then buy again to take advantage of the better rate. Just make sure you know the cut-off point for cancellation, as many companies will charge a fee should you wish to cancel after this point.