Holidaymakers urged to ‘watch exchange rate movements carefully’
26 September 2022, 13:54
It was ‘impossible to predict how rates would behave in the coming weeks’, a foreign currency provider warned.
Holidaymakers concerned about the fall in the value of the pound are being urged to “watch rate movements carefully”.
Nick Boden, head of foreign currency provider Post Office Travel Money, warned that “sterling’s volatility makes it impossible to predict how exchange rates will behave in the coming weeks”.
Purchasing 500 US dollars cost around £480 at some points on Monday, compared with approximately £440 on the same day last week.
Mr Boden said: “Our advice for people planning overseas trips is to watch rate movements carefully in the weeks leading up to their departure, and change money at times when the rate rises.”
Mr Boden noted that sterling’s drop in value is “much smaller” against currencies used by European countries.
He said: “For those Britons planning a late summer break to Turkey, sterling will still buy over 53% more Turkish lira than a year ago.
“City break holidaymakers visiting Budapest will get almost 8% more Hungarian forints for their pounds.”
Airlines pay for a large proportion of their costs in US dollars, such as fuel.
EasyJet chief executive Johan Lundgren admitted that the fall in the value of the pound “does have an impact” on its finances.
Speaking at the carrier’s headquarters at Luton Airport, he said: “Clearly, the dollar is very strong versus the pound.
“It has an effect. We have a lot of expenses in dollars and we have revenues coming in in pounds.
“But, on the other hand, we’re one of the best hedged airlines when it comes to the fuel position and the effects of this going forward.
“Of course, it does have an impact but it has less impact on us versus some of our competitors.”
Aviation consultant John Strickland of JLS Consulting said carriers will face increased bills for buying fuel and leasing aircraft.
He told the PA news agency that airlines will be hit by “immediate cost increases”, noting that fuel prices have been “high for quite a while anyway”.
Mr Strickland said exchange rates are “adding a considerable complexity” to airlines’ plans for the coming months.
He added that it “doesn’t bode well for winter” and creates “even more uncertainty about next summer”.
