The pound has been rising pretty steadily against the euro for more than a year. You could buy 1.22 euros for every pound last summer – and by Christmas the rate had climbed to 1.24, according to figures from Travelex, and since then it has jumped by 10per cent. Anyone exchanging £500 should get around 660 euros, compared with 590 last year – but use a site like money.co.uk to check the best rates.
Sterling has also risen against a range of other currencies. It has more than doubled against the Russian rouble – so for an Easter trip to Russia your roubles would cost half as much as two years ago. Sterling exchange rates against the Norwegian Krona, Australian Dollar and South African Rand are also high.
The strong pound in Europe is largely down to the weakness of the euro. Chris Saint, head of currency dealing at Hargreaves Lansdown, says: “The ECB is printing money on a pretty big scale – 60 billion euros a month until September 2016. When the decision was announced in December the euro fell sharply and has dropped about 15per cent over the past three months.”
Anyone who picked up their holiday cash for an Easter break earlier in the month , when the rate hit 1.40, looks to have done well.
Some commentators predict a further slide in the euro. But if you are planning a trip to Europe in the summer, it might be worth exchanging some of your money now in order to lock into favourable rates. Mr Saint says: “Currency markets can be volatile. They also tend to overreact, so the euro rate could come down as quickly as it went up.”
Brian Jamieson, managing director of Centtrip, says: “Many of our customers are locking in current attractive rates and buying euros to use today or at a later date.”
You can get foreign currency from a bank, building society or bureau de change. You can even exchange money at the Post Office, Marks & Spencer and some of the big supermarkets.
Just about everywhere you will pay “no commission” – because sellers make their money on the exchange rate.
Bob Atkinson, travel expert at MoneySuperMarket, says: ” When buying foreign currency, focus on the total price including charges rather than the exchange rate, and compare the cost of the same amount of holiday cash between providers to find the best deal.
“If you’ve left it too late to organise your cash, then pre-order it for collection at the airport via Travelex, as this will save you a significant amount on airport walk-up rates.”
If you are ordering your currency over the phone or online, watch out for delivery fees. A charge of £5 or so for delivery could wipe out the benefit of a better exchange rate.
An alternative to cash is a pre-paid currency card. You simply load it up with your chosen currency in advance and use it like a debit card when you are on holiday. You can find details of pre-paid cards on price comparison websites, but CaxtonFX, FairFX and Ukash often come out well.
Again, you should look for a card with a decent exchange rate. Watch out for fees, too. Many cards charge an application fee of up to £10. Some cards also levy a fee for each transaction. Fees for cash withdrawals at an ATM are common. You might even be penalised with an inactivity charge if you don’t use the card for a certain period.
Karen Harkin of Asda Money, which runs its own currency card, says it allows holidaymakers choose when they buy their travel money, loading currency onto it over time, rather than at one go. Rates are locked at the time of purchase and holidaymakers can use it in the same way as a credit or debit card. The Asda card has no fees for ATM withdrawals.
Myles Stephenson, chief executive of MyTravel Cash said cash loading onto its prepaid Euro Currency Card was up more than 45 per cent so far this year compared to early last year.
When it comes to using cards abroad, it pays regular travellers to apply for a credit card such as Halifax Clarity (open to all) or Nationwide Select (open only to Nationwide current account customers), which do not charge transaction fees for purchases abroad.
If you do have to use your normal credit or debit cards, be sure to make payments in the local currency instead of paying in pounds. This can save up to 5 per cent of hidden extra cost.
Mr Atkinson says: “Make sure your card provider knows you are travelling overseas or you may find your transactions are blocked. If you are lucky enough to return home with unused spending money, you have a few options. You can keep it until your next trip if it’s a popular currency, or try and sell it to a friend at the rate you bought it. If you do need to sell it back to a provider then shop around for the best rate, and remember to focus on the total amount you’ll get back, rather than the rate and charges.”