The pound jumped to its highest level this year, gaining ground on many other currencies including the dollar, meaning families will see their money go further overseas this summer.
Sterling is trading 0.3 per cent higher against the dollar, edging closer to $1.30. It was last at that level in August 2022.
The pound has been lifted by stronger than expected GDP figures this week and Labour’s general election victory while the dollar weakened as US inflation falling further than expected.
As such, there was growing speculation that the US’ Federal Reserve may cut interest rates before the Bank of England.
This is good news for holidaymakers as those going abroad this summer will see their money go further in a number of countries, not just the US.
Analysis of today’s exchange rates by Post Office Travel Money shows that sterling is stronger now than when the general election was called on 22 May in 21 of 26 bestselling currencies, including the euro and the dollar.
It is also stronger than it was a year ago against 22 of its top currencies.
Experts say families should take advantage of the improved rates as they will see their holiday money stretch further than before.
James Lynn, co-founder of Currensea, said: “There is great value to be had this summer with many destinations more affordable than this time last year.
Those headed to the US or Europe this summer will see their savings stretch further than before so there is value to be had.
“Families looking to make the most of their travel budgets should consider visiting firm favourites such as Egypt or Turkey as well as heading further afield to Indonesia or Vietnam where their savings will stretch even further.”
Sterling has been moving up steadily against the euro over the past three months and is continuing to do so. Compared with 22 May, the pound is 1.2 per cent stronger now and has gained 2.5 per cent since its 2024 low point on 22 April (€1.1274). Over the past year it has risen 1.5 per cent.
Sterling has also gained a further 5 per cent against the Turkish lira since the election announcement and is worth 30.6 per cent more year-on-year as Turkey’s currency continues its long fall against the pound. This means that British holidaymakers can expect to receive around £117 extra in Turkish lira on a £500 currency transaction.
The biggest year-on-year gain for sterling has been against the Egyptian pound, which means that destinations like Sharm el-Sheikh and Cairo look good bets for British tourists.
Laura Plunkett, Head of Travel Money at Post Office, added: “With the school holidays just a fortnight away now, it will make sense for families to check the exchange rate for their planned holiday destination regularly to see how sterling moves after the election and things settle down. This will enable them to they buy their travel money when sterling is at its strongest.
“The pound has been moving up against the euro and other key holiday currencies like the Turkish lira since late May. There may be some volatility ahead, but experience from past elections shows that this usually settles quite quickly.”
All exchange rates mentioned were correct at time of writing.
Top tips for saving money while travelling:
Zero per cent commission isn’t always the best deal when exchanging currencies. Many providers include hidden costs by working profit into their exchange rate instead. Don’t get hit by overseas ATM charges – some can charge you around £5 for every transaction. Avoid exchanging money at the airport – it might be convenient, but it tends to include extortionate service fees. Always pay in local currency when abroad – often card machines ask you to pick between GBP and the local currency. Don’t make the mistake of choosing GBP. If you’re thinking about using a pre-paid card, check the fees to withdraw any leftover funds at the end so you’re not caught out. Travellers return with an average of £87 remaining on these cards and then face high fees to exchange this back to sterling.