The value of pound against the vast majority of other major currencies has increased over the last six months, according to the latest research from Post Office Travel Money.

The study looks at the pound’s value against 40 other currencies over both 12-month and six-month periods.

It found that the UK currency had strengthened against 38 of these currencies since October 2016 – the pound has only lost value against the Russian ruble and South African rand over the six-month period.

The pound has increased the most in value against the Turkish lira over the last six months with the pound now buying 25% more lira than in October when sterling reached its lowest point during 2016.

The Post Office also said that the pound reached its highest level in 2017 against both the euro and US dollar last week, following the surprise announcement that there will be a general election in the UK on June 8.

The pound was up by 8.6% against the euro since October, although it was still down by 5.2% in value over the last year. Sterling has increased in value against the US dollar by 5.7% over the last six months.
 
Andrew Brown from Post Office Travel Money said: “Sterling’s recovery comes at a good time as the holiday season gets underway in earnest.

“But it is also true that there was no sign of a slowdown in currency sales in the first three months of the year when the pound was weaker. This is a clear indication of how resilient consumer demand is for foreign holidays.”

The Post Office said that its online currency sales rose by 55% for the year ending on March 31, while there was also an increase of 47% during the first three weeks of April compared with the same period last year.

Despite all the currency fluctuations since the referendum vote to leave the European Union in June 2016, the three top-selling currencies during the first three months of 2017 remained the euro, US dollar and Australian dollar – the same as last year before the referendum.

The currency to see the biggest year-on-year sales growth for the Post Office was the Indonesian rupiah with a 60% increase followed by the Turkish lira (+46%) and Omani rial (+42%).

There were also major increases in sales of the Bulgarian lev and Malaysian ringgit, which both rose by 33% year-on-year, while the Post Office saw a 36% surge in demand for the Kenyan shilling.

“We have seen healthy levels of growth in sales for two-thirds of our 20 bestsellers including the euro and dollar and only marginal falls for the remainder,” added Brown.

“At the same time, there has been double-digit percentage growth for 18 of our 20 fastest growing currencies, two-thirds of which are for some of the world’s most exotic destinations.”

The Post Office released its latest report just a week after publishing its Holiday Costs Barometer (TTG, April 20), which found that Sunny Beach in Bulgaria offers the best value for in-resort items such as drinks, meals and other holiday purchases.

So with the currency markets having been so volatile over the last year and the possibility of more fluctuations due to the general election campaign and result, what advice should agents be giving to their clients?

“Our advice has always been to watch currency movements very carefully to judge the best time to purchase travel cash and there are signs that savvy travellers are increasingly planning ahead to do just that,” said Brown.

“The sharp rises we have seen in purchases of euros and other popular currencies suggest many holidaymakers are being proactive and buying their holiday cash early to take advantage of the improving exchange rates.”