Pound Slides On ECB Comment
The pound reached an eight-month low against the Euro on Friday 21st July, following the impact of remarks made by the European Central Bank (ECB), in a revelation that will doubtless cause problems for any British citizens looking to holiday in Europe during the summer months.
The Sterling fell close to 1.11 Euros following comments made by Mario Draghi, current president of the ECB, and the currency was further impacted by the ongoing fears regarding the Brexit negotiations.
Following the fall, the Pound was at its lowest level since November last year.
Brexit Reality
Several newspapers, including the Daily Express and the Daily Star, have already reported British holidaymakers being offered the lowest exchange rate ever against the Euro, with a figure of 88 cents per pound available at one particular airport.
Unless the pound rallies in the very near future, British families will be unable to spend as freely if heading to the continent during the just-beginning school holidays.
Draghi Euro Stimulus
Mr Draghi noted that changes to the stimulus programme would be discussed by those responsible for policy in the post-summer period. With the Euro having strengthened in recent months as a result of the pound’s constant instability, it may be that policy will be tightened in future.
The pound’s fall also took it lower when compared to the US dollar, despite Washington currently undergoing its own form of political instability. During Friday, the pound fell to below $1.30 following a few days of relative strength.
Thursday 20th also saw further pressure being heaped on the pound following the announcement that Brexit talks had led to ‘fundamental differences’ between the UK and the EU on matters such as the rights of EU citizens and what the jurisdiction would be for the European Court of Justice.
Previous Weekly Data
Earlier on in the week, official retail sales figures had been released and had actually caused a slight strengthening of the pound. However, both Thursday and Friday’s situation negated the brief increase.
It remains to be seen how the pound will perform over the summer, and how it will impact UK tourists heading abroad over the next few weeks.