Holidaymakers benefit from eurozone uncertainty
Tuesday 08 May 2012
Holidaymakers travelling to eurozone countries are getting the best value for money in three-and-a-half years amid the continuing eurozone crisis.
The pound has risen against the euro to levels not seen since autumn 2008 in the wake of elections in France and Greece which caused heightened uncertainty over plans to tackle the debt crisis.
The fallout has led to some foreign exchange outlets selling euros at a rate of more than 1.20 to the pound, a rate which could rise further still in the coming months due to the pound's "safe haven" status.
The favourable rates could bring some welcome relief this summer to families whose budgets are under pressure from inflation, which has driven up living costs and left them with little disposable income.
Currency specialist Travelex said demand for the euro shot up by 290% on its website today compared with a year ago, showing how holidaymakers are already moving to take advantage of the pound's relative strength.
Elvin Eldic, regional manager of Travelex UK, which is offering a rate of just under 1.21 euro, said: "The weekend's elections in France and Greece have thrown the eurozone into fresh turmoil, driving the pound to a three-and-a-half year high against the euro.
"While the pound has been hovering around a 22-month high for the past fortnight, the latest boost means tourists will be getting over 1.20 euros for every pound for the first time since November 2008.
"That's an extra 52 euros for every £500 exchanged for British holidaymakers heading to the continent."
Jacqui Holt, foreign exchange director at Thomas Cook UK and Ireland, said that British tourists travelling to the eurozone will be able to get 10% more than they could a year ago with their spending money, adding: "There's never been a better time to book a eurozone holiday."
The Post Office is also offering an online exchange rate of just under 1.21 euro, or 1.15 in branch, or more than 1.20 in branch for transactions of more than £1,000.
Andrew Brown, Post Office head of travel money, said: "Holidaymakers visiting Post Office branches today will find that sterling now buys more euros than at any time since November 2008.
"As Europe hits the news headlines once again, this is great news for anyone planning a trip to the eurozone this summer. Our advice to travellers is to keep a close eye on the rates as their holiday approaches."
Meanwhile, Richard Driver, a currency analyst at Caxton FX, predicted the pound will grow stronger in the coming months.
The London market has been holding firm in the face of eurozone volatility, but traders remain braced for fresh turbulence after Greece's failure to form a government cast further doubts over the country's rescue as well as the long-term future of the single currency.
He said: "Sterling is gaining plenty of momentum thanks to its growing safe-haven status and considering the chronic instability within the eurozone, we could realistically see the pound hitting the 1.30 euro mark by the autumn."
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