Latest update: Saturday 9 December 2017, 12:45pm
Pound sterling had a six month high yesterday against the euro, and FairFX have predicted an increase in Britons buying holiday money now.
This would allows Britons to get the best exchange rate while avoiding future GBP currency instability.
It rose up in value against its rival currency after a Brexit agreement on the divorce bill and Irish border question.
The pound rose up to six per cent against the EUR currency, compared to the lows during the summer.
The GBP currency has also risen up more than 12 per cent against the US dollar since the beginning of the year.
Friday 8 December 2017, 7:30am
The pound sterling recovered against the euro today, now converting to €1.1478 against its rival currency according to figures at 11:24am today.
This compares to yesterday morning when it converted to €1.1341.
“Traders have welcomed the news of an agreement between London and Brussels in the first phase of the Brexit negotiations.”
“It’s been clear for some time that the markets prefer an agreement, however expensive for the United Kingdom, to a non-deal scenario,” says Carlo Alberto De Casa, Chief Analyst at ActivTrades and Technical Analyst for La Stampa.
Pound to euro exchange rate: May and Juncker agree deal inspiring hope in the pound
“After several weeks in a side trading interval between 1.11 and 1.14, we had a break from this channel and the pair peaked at 1.15, at its highest for 5 months.
“This actually confirms what we think will be a more general outlook for the pound sterling, which could further recover in the coming months if the Brexit negotiations can begin to run smoothly.”
The welcome news for the GBP comes after Theresa May announced a Brexit deal has been reached.
The value of the GBP has been closely linked to Brexit negotiations since June 2016, when a UK majority voted in favour of leaving the EU.
Early this morning, it was announced at the EU Commission headquarters Theresa May and Jean-Claude Juncker had agreed a divorce bill deal, including provisions for the Irish border question.
Pound to euro exchange rate: PM Theresa May has finally resolved the Irish border question with EU
Both these factors – how much the UK would pay the EU to leave the organisation, and the protection of Irish cross border activities after Brexit – had previously held up negotiations.
However, a press conference at the headquarters this morning has inspired hope in the GBP currency, as reflected in its boosted value this morning.
Juncker told the press: “I will always be sad about this development but now we must start looking for the future, the future in which the UK will be and will remain a close friend and ally.
“The Prime Minister and I discussed the need for a transition period and we dedicated much of our meeting to the joint vision for a deep and close partnership.
“It’s crucial for us all that we keep working closely together. We will take things one step at a time.
“But today I’m hopeful that we are all now moving towards the second phase of these challenging negotiations and we can do this jointly on the basis of renewed trust, determination and with the perspective of a renewed friendship.
The agreement comes ahead of a Brexit summit on 14 and 15 December, where EU leaders will meet in Brussels.”
Pound to euro exchange rate: Juncker says it’s “crucial for us all” to work together
Irish border concerns continued driving pound exchange rates on Thursday
Earlier this morning, Laura Parsons, currency analyst at TorFX, said: “Irish border concerns continued driving pound exchange rates on Thursday, with rumours that a draft agreement had been reached lending Sterling support.”
“GBP/EUR was driven above €1.145 despite better-than-forecast Eurozone growth data and the pairing could extend gains if it appears an accord will be reached in time for next week’s EU summit.
“PM May is set to meet the head of the EU commission in Brussels later today.
“UK industrial/manufacturing production, construction output and trade balance figures could also inspire pound movement before the weekend, as could the BoE’s 12 month inflation expectation report.”