What’s Moving the Markets and What It Means for Travel Businesses
- Pru Goudie
- Aug 24
- 4 min read
By Smart Currency Fintech
Almost all travel businesses are exposed to fluctuations in exchange rates, but understanding exactly what those movements mean for margins and cash flow can be far less straightforward. A 5–10% shift in a major currency pair can have a noticeable impact on the bottom line, particularly for businesses operating across multiple markets.
With currency markets facing continued uncertainty, ATN Business Member Smart Currency Fintech looks at the key economic and geopolitical developments shaping the pound, euro and US dollar, and what they could mean for travel businesses over the coming months.
The July–September edition covers the major events and dates to watch through to October, alongside expert analysis of the factors likely to influence currency markets.
A free copy of the Quarterly Forecast can be downloaded here
A febrile summer
2026 has been a year of upheaval in currency markets. The big story has been the war in the Middle East, which has snowballed from a surgical military operation into a months-long energy crisis.
Efforts to end the conflict and reopen the Strait of Hormuz, the narrow waterway through which around one fifth of the world’s oil flows every day, have dragged through this summer, leading to significant volatility for the pound, euro and the US dollar.
The lack of clarity around energy prices has caused inflation estimates to modulate across the globe. There is now a significant degree of uncertainty around the path for interest rates, with many experts predicting another painful round of hikes should prices stay stubbornly high into the autumn.
Britain’s new PM
Through all this, the arrival of the UK’s seventh prime minister in a decade has flown a little under the radar.
Andy Burnham took over from Sir Keir Starmer promising a straight-talking, no-nonsense government that would put the cost of living at the heart of its mission. The early signs are that Burnham will stick to this, cutting business rates for hospitality outfits and hinting at relief for consumers on their energy bills.
Yet, without a formal election cycle or a manifesto, many questions remain around the new government. Burnham shuffled the ministerial pack when he entered Downing Street, welcoming John Healey (himself something of an unknown in financial markets) into the office of the Chancellor.
For travel, much rests on the outcome of the autumn Budget, which we now know will arrive at the end of October. Given parliament is away for its summer recess, it’s unlikely we’ll get much clarity before the end of August.
ECB moves first
The European Central Bank was the first of the world’s major rate setters forced into a hike by the energy crisis. Policymakers increased interest rates for the first time since 2023 in June, but terminal rates remain well below those of its peers in the UK and across the Atlantic.
The euro has struggled to generate much momentum against its key rivals this summer. Major headwinds including the energy crisis and the tepid growth of key player Germany have served to cap its upside, for now at least.
The US dollar’s strange show
Across the Atlantic, there are ominous signs that the American experiment is falling apart. However, there are equally convincing signals that the economy has never been stronger.
This is all part of an increasingly baffling and unexplainable dollar trajectory. Should the US dollar be strong given national debt is stretching towards $40trn? To what extent is the war propping up the dollar? Will American democracy even be able to outlast November’s midterm elections?
It’s all unclear. For now, the American economy is enjoying a gilded bash that would make F Scott Fitzgerald blush. The AI investment splurge has sent stock markets to record highs. What remains unclear is whether the immense spending on AI infrastructure will generate returns sufficient to justify its valuations or whether July's sell-off was merely the first crack in the boom. For now, GDP growth shows no signs of slowing despite a slightly more dour mood in the economy at large. The problem is that nobody can tell what might happen next.
Key dates and events
The July-September Quarterly Forecast also outlines the key dates and events that might send the pound moving up or down. This is all laid out in a simple calendar format, meaning you have full visibility of all key datapoints or political events on the horizon.
How Smart Currency Fintech can help
Smart Currency helps UK tour operators, DMCs and OTAs understand that currency risk is just the first step in addressing the risks to their bottom line.
Smart Currency Fintech has developed a suite of cutting-edge solutions, backed by the support and intelligence that only humans can provide.
Their technology helps UK travel companies protect their profit margins across the booking curve, while also saving time and resources on menial manual tasks.
Plus, their integration with sister company Smart Currency Business gives travel businesses access to comprehensive hedging solutions such as SmartHedge PRO, as well as a streamlined payment portal to make transferring, tracking and reporting simpler than ever.
If you have any questions, drop a line to Jatin
Smart Currency Fintech is a Business Member of ATN
