Exchange rates fluctuate, as any self-respecting firm like Knightsbridge FX can attest to. Ups and downs are expected, but really low downs are to be avoided.
Unfortunately, the UK pound is seeing exactly that, at least in their airports, as airport exchange rates across the UK drop to about 14% lower compared to the market rate, with some dropping so low as to be 24% lower compared to the market. According to data from the travel money provider Fair FX, some rates are so low that people get €0.87 and $0.97 to the pound.
What this means is that, if travellers get their money exchanged at the UK’s airports, they could lose anywhere between £108 to £122, depending on the market rate in comparison, with £1 to €1.109, and £1 to $1.283. It’s particularly bad for anyone getting exchanged at Stansted airport, which currently offers the lowest rates for both euros and dollars anywhere in the UK, with rates of £1 to €0.87 and $0.97.
London City Airport Travelex, Manchester Travelex and Southend Moneycorp are also posting some bad rates, with rates sitting at £1 to $.1056, $1.057 and $1.057, respectively.
FairFX CEO Ian Strafford-Taylor says that this is just showing how airport exchange rates are ripping travellers off, which they have been for a long time now, resulting in travellers ending up with far less money than they could have had they gotten it elsewhere. He says that any firm like Knightsbridge FX know that rates will also be in fluctuation, and that the pound has been in a bit of a rollercoaster recently, but that, regardless of the state of the currency, airport exchanges tend to offer significantly lower rates to travelers.
Strafford-Taylor further adds that FairFX investigated airport exchange rates across the bank holidays, and found that the margins aren’t consistent, fluctuating wildly throughout the year.
All of this combined is designed to bump up credit card costs, at the travellers’ expense. Hotels and other businesses are given incentives to persuade UK visitors to settle their card bills in sterling, attracting them with the certainty of knowing the costs in their currency, but with the caveat of low exchange rates.
In the current position of the sterling, this results in the trader and the financial intermediary sharing handsome profits.