Why you should get your holiday euros now - but hold off buying US dollars amid the Trump tariff turmoil
Tourists risk losing hundreds off their spending money by picking the wrong time to buy currency.
Exchange rates continually see-saw, but this year the volatility is especially heightened thanks to sweeping US trade policies that affect markets around the world.
Currency experts here reveal when they think you should buy to get the best deals.
Get euros now
If you're jetting off to Europe in the next month, buy euros as soon as possible, says Tony Redondo, founder of Cosmos Currency Exchange.
The euro has been strengthening against the pound in recent weeks – meaning each £1 won't go so far – and there is likely to be more to come.
It has benefited from US tariff policy, which has made investors nervous about buying dollars.
Money has instead flooded into European investments, which have been seen as a safer option in an uncertain climate. That has pushed up the value of the euro – not only against the dollar, but sterling as well.
The pound could weaken further against the euro due to a poor economic outlook in the UK. Last week there was a sharp drop in the pound's value following unexpectedly dire official data, which revealed the economy shrank by 0.3 pc in April.
This could force the Bank of England to cut rates as soon as August, which could spell further bad news for our currency.
Mr Redondo says: 'Until last week, the view in the markets was for the Bank of England to cut interest rates maybe one more time in 2025. This week has changed that, with two cuts now forecast.'
Hold off dollars
Heading to Disney World during the school holidays? You're in luck as you can currently get $41 more than you could last June for the same £500.
Simon Phillips, at travel money firm No 1 Currency, explains that while the UK's weak economy is contributing to the pound's underperformance against the euro, the pound's strength against the US dollar is being driven by President Trump.
On Friday the dollar sank to its lowest in three years against a basket of currencies as his trade policy continues to cause disruption and uncertainty.
Plus, there are growing expectations the Federal Reserve will cut US interest rates, which will trigger an outflow of investment as individuals pull their money in search of higher returns.
Prem Raja, of Currencies 4 You, suggests holding off buying dollars until nearer your time of travel – especially as Mr Trump has floated the possibility of an extension to the 90-day tariff pause.
He says: 'If we keep getting tariff extensions and volatility, the pound will perform well against the dollar.'
Analysts at Goldman Sachs agree. They believe the dollar's weakness will continue due to uncertainty from policies such as the tariffs – while both the euro and pound are set to benefit.
Best of both
because no one knows for certain what will happen to rates, one way to exchange your currency is to 'hedge your bets', Mr Phillips says.
'We can't work out what's going to happen, particularly with President Trump in charge. So buy some currency now and buy some later,' he says.
'You'll never get all your money at the best rate, but you won't get the worst, either.'
Where to buy
bureaus offer different rates so shop around. Think about your travel money before arriving at the airport – passengers often pay a premium rate at the gates.
Also, don't rely on cards all the time when abroad, especially after the power outage in Spain and Portugal which left households unable to pay for items on a card machine. Plus, cash is still king in many parts of Europe.
Think about a mix of both cash and card. If using a debit or credit card, choose one with no foreign transaction fees. Options include Starling and First Direct.
Pre-paid cards are also an option. This way you can lock in an exchange rate ahead of time if you want certainty, unlike with a regular credit or debit card.
Options include the Wise card, which costs £7 to order.
You can read our full list of our best picks for free spending abroad here.
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