Festive holiday makers face a potential shock if they wait to change money at the airport.
One pound now buys just one dollar and one euro at some airport currency brokers, according to a survey of brokers by Yahoo Finance UK. That is close to a historic low for both pairings.
Travelex’s quoted a pound exchange rates of 0.9281 for euros and 1.0531 for dollars at its Heathrow branch when the company was contacted by telephone on Friday morning. The representative said that the rate was indicative and subject to change.
Meanwhile, £1 will buy just $1.137 and €1.0083 at International Currency Exchange (ICE), an employee at one of its Heathrow branches told Yahoo Finance UK.
Moneycorp’s Gatwick branch quoted a euro price of 0.9391 and a dollar price of 1.0664.
All are historically low rates for sterling against both the euro and the dollar. The pound has faced sustained selling pressure since the vote to leave the EU in 2016. Sterling was trading at about $1.50 and €1.27 in June 2016, just prior to the Brexit vote.
However, David Cheetham, the chief market analyst at trading platform XTB.com, told Yahoo Finance UK: “The headlines of the pound reaching parity against the dollar are as much, if not more, due to poor rates at airports rather than a large depreciation in sterling.”
Fawad Razaqzada, a technical analyst at FOREX.com, told Yahoo Finance UK: “Brokers deal with wholesale markets, airports etc with retail. The latter make money by charging big spreads, typically 500 pips or more, while brokers have much smaller spreads of 1-2 pips but because of use of margin, this significantly lower spread still allows for good revenue.”
Cheetham said: “Whilst holiday makers are unlikely to ever be able to get the exact interbank rate, they can get pretty close to it by ordering currency in advance or using pre-paid cards abroad.”