It’s getting cheaper to go on holiday to America – the pound just hit a post-referendum high of above $1.43.
That’s 17% better than the October 2016 low of around $1.22.
And it looks set to keep rising.
“The pound will strengthen to $1.50 against the US dollar and €1.20 against the euro over the next 12 months,” predicted Miles Eakers, chief market analyst at currency firm Centtrip.
Of course, before the referendum you could have got $1.50 for every pound you exchanged, a year before that you could get more than $1.70, and in 2007 the figure was $2.09.
But it’s still excellent news for people looking to book trips to the States – or even pick up some shopping here.
What it means
Put simply, British holidays to the US just got a lot cheaper.
More than that, commodities like oil – and therefore petrol and jet fuel – are also cheaper, because they’re priced in dollars.
And cheaper petrol also means cheaper everything else eventually, as it lowers delivery costs.
Even if you’re not planning a trip across the Atlantic, you can still take advantage of a surging pound by buying US goods in the UK. Our full guide to US shopping from Britain is below.
Protecting your holiday money
No matter what happens to the exchange rate over the next few weeks, you need to make sure you’re not being ripped off when buying holiday money.
Here are FairFX’s tips on getting the best exchange rate you can:
Track currency: Set up a currency tracker that alerts you to good rates.
Lock-in rates: If you know you’re travelling later this year, plan ahead. Pre-load a prepaid currency card to lock in rates and protect yourself from any potential further decline. If you’re happy with the current rate on offer, buy your currency now to guarantee that rate for your future holiday.
Buy wisely: Don’t leave changing your travel money until the last minute. Exchange rates at airports can be over 10% more expensive meaning you could lose £100 of cash for every £1,000 you change.
Stay alert: Once you’re abroad, beware of the double exchange rate dupe. If you let the seller in a shop or restaurant covert the price back into pounds, they will choose their own exchange rate and you’re more likely to be on the less favourable end of the deal
Cards: Debit and credit cards are good backups but beware of ATM and transaction fees as well as what exchange rate you’ll be forced to use. Instead, use a specialist currency card, app or a card designed for overseas spending
Always use local currency: If you have the option of paying – or withdrawing cash – in pounds rather than the local currency, always say no. This allows the other party to decide the exchange rate, a process known as Dynamic Currency Conversion, and it’s unlikely the rate will be in your favour.
Different money habits: Check out any travel money anomalies before you travel. In America, for example, you definitely need to remember your PIN – outlets are migrating from swipe & sign to chip & pin so don’t get caught out. Contactless technology, Apple Pay and the like are also not evenly distributed – so what works to pay at home might well not work overseas. Make sure you have some cash just in case.