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The Pound has risen sharply this week, buoyed by a supportive global backdrop of rising stock markets and a favourable decision from the Bank of England on Thursday.
GBP/EUR pushed higher on Friday thanks to an above-consensus UK retail sales report, which justified the Bank of England's message that there was no rush to cut interest rates.
The exchange rate rose to a high of 1.1932 on Friday but then proceeded to pare the advance, signalling that it could be difficult to sustain these levels. We think those looking to secure euros should at least consider covering some of their exposure in order to protect against a more meaningful short-term pullback.
The retail rates to euro buyers range from highs at 1.1860 to 1.1491. In our previous update, the Pound was under pressure and the best spot - or market exchange rate - was 1.1865, which meant the rate offered to retail buyers was to be found in a range of approximately 1.1810 to 1.1330.
For large international transfers, the best euro exchange rate is offered by Horizon Currency at 1.1860, which is equivalent to that offered by Wise (Wise say they offer the market rate but they have a sliding fee, which gives an effective exchange rate similar to that of Horizon).
For holiday money and cash requirements, Wise is again the most competitive, with a fee-adjust rate of approximately 1.1860, but this is only available on a currency card.
For cash, our holiday money comparison shows TravelFX leads the pack at 1.1720. M&S is the most competitive of the high-street providers, with the Post Office screening as the least competitive.
Turning to the market, we think the Pound is well positioned to deliver further gains in the coming weeks, however, a tough resistance zone is proving a technical hurdle that could continue to frustrate buyers of euros.
It helps to flip GBP/EUR onto its back and see what's happening with the EUR/GBP exchange rate, which is the proper conversion for market traders. It is trading near the 0.84 level, which acts as a formidable 'round number' psychological support for the Euro.
In fact, the Euro has not closed below here August 2022. Market participants will be buying euros here in the hope that it will bounce back above 0.84, as has been the case so many times in the past.
From a GBP/EUR perspective, this means there is great selling interest at 1.1904 (which equals 0.84 in EUR/GBP). But we would widen the band to a resistance zone between 1.1904 and the briefly held July 2024 peak at 1.1928.
We think a break towards 1.20 will eventually happen in the coming weeks.