Eurozone holidaymakers voting for Brexit should buy Euros now to hedge their bets on the EU referendum, financial research experts Consumer Intelligence advises.
A vote to leave on June 23rd is forecast to send the pound to a new low of €1.08 from around €1.27 now and could also weaken the pound against the dollar taking it to around $1.20 from $1.44.
But a vote to remain is likely to boost the pound marginally meaning customers will receive better deals on their cash if they hold off on the referendum result.
Holidaymakers who cannot make up their minds ahead of the vote can protect themselves with guaranteed buyback deals on holiday cash from providers such as Moneycorp, America and Travelex who will all buy money back for a price.
The uncertainty of the EU referendum has already hit the pound – it started the year at around €1.35 and on the day the Referendum was confirmed it was around €1.29. It has had less effect on the dollar – it started the year at $1.47.
Ian Hughes, Chief Executive of Consumer Intelligence said:
“A Leave vote will weaken the pound in the short-term against the Euro and push up the cost of holidays in the Eurozone."
“No matter your view on what is right for the UK it can make sense to buy holiday cash now and avoid losing up to 20% on your Euros if you wait until June 24th and the UK votes to Leave."
“Shopping around for holiday cash makes even more sense as rates can vary widely and if you want further protection then you can look at guaranteed buyback deals so you can take advantage of potentially better deals.”
Customers taking out a buyback guarantee on holiday money need to calculate the cost and factor in how long the guarantee lasts. Typically guarantees last between 30 and 45 days and cost up to £3.99 per transaction.
Referendum aside the pound has weakened substantially against the Euro since last summer and to an extent against the dollar so holiday cash will not go as far this year.
Rates last July for the pound against the Euro were €1.41 so even comparing last year with now there has been a fall of around 10% while the dollar in July last year was around $1.56.
At Consumer Intelligence we are testing FX services from all of the major providers in the market across all our core geographies.
This puts us in a unique position to help financial service providers understand what drives buying behaviour in the foreign exchange market with the forex pricing toolkit.
Notes to Editors
1 http://www.xe.com/currencycharts/?from=GBP&to=EUR&view=1Y rates analysis on April 2016
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