Many holidaymakers have jumped at the opportunity to cash in on the strength of the pound by purchasing foreign money ahead of the holiday season.
Thomas Cook have released statistics that point towards a high increase in the amount of people booking holidays and also an increase in the amount that they are willing to spend on them.
According to the travel agent, sales of Euros have increased by a third when compared with the same time last year.
The company’s overall sales have also increased by roughly two thirds.
In the previous two weeks Thomas Cook has sold just over Ä31m, this works out at about £22.8m.
Its head of foreign exchange was talking to Radio 5:
“Some customers are forward buying for holidays they have already booked, while others are buying now before they have even booked their holiday.”
The Post Office have also released figures that display a rise in the sale of Euros that is equal to roughly a 50% increase. There was even one week in January when they reported an increase of 363%.
This boost in the sales of Euros has also been noted by online currency brokers.
HiFX a brokerage based in Slough, has seen its number of new clients go up by around 60% at the beginning of this year. They report that many of these new clients are expats that are purchasing property in the EU.
Analysts of the FX markets say that although the pound has stayed fairly low against the dollar, it is still benefitting from the growth in the UK’s economy in comparison to the Eurozone.
Recent times have seen the pound strengthen against many currencies around the world. Some of these currencies are extremely popular with holidaymakers, such as the Thai baht and the Turkish Lira.
“[Sterling’s] biggest gains have been against the Scandinavian and Eastern European currencies,” says Andrew Brown of Post Office Money.
“People seem aware of this and are picking places like Mexico and Mauritius, where they know they can get more for their money.”
Some currency brokers have stated that the uncertainty that currently surrounds the general election is to blame for the pounds fall against the dollar – down 1.3% on Friday.
In spite of this, most economists are expecting to see the pound increase in strength as the year goes on.
Many brokers have reported that clients are using “forward contracts”. This allows them to fix the price of sale at the current market rate.
Jeremy Cook, the chief economist of World First brokers, stated:
“I think if we see a quick and relatively painless resolution to what goes on in Greece, we may see a little bit of euro strength. In the longer term, however, I am looking to see sterling… come back up to the 1.45 level over the rest of the year.”