Why is your holiday exchange rate so awful? Because investors see hope for the eurozone

As usual for August, I’m in France, where the news in brief is ‘Euro up, Macron down’. The youthful French president, who swept to power with two-thirds of the second round vote in May, has seen his approval rating plunge to 36 per cent — at the time of writing, 2 per cent worse than Donald Trump’s latest score in the US. Macron’s move to slash housing benefits for millions of lower-income citizens, including students, is one factor that has brought his honeymoon with French voters to an abrupt end, though his proposed labour law reforms are still playing well with employers. Two-thirds of French small-business owners say they are satisfied with his performance so far and optimistic that he will improve the economy — an accolade never achieved by his socialist predecessor François Hollande, and only briefly by Nicolas Sarkozy before that.

As for the euro, it has gained 12 per cent against the dollar this year, recently trading back above its symbolically important January 1999 launch rate of 1.1789. It has also soared against the pound — as British holidaymakers may have noticed, especially if they bought their euros at Southampton airport when Moneycorp was reported last week to be offering a cruel exchange rate of €0.90 to the pound.

The currency trend is bad for French exporters and a dampener on growth, but good for continental self-confidence. The euro has even been perky against the safe-haven Swiss franc, indicating a real swing of investor sentiment towards the eurozone, where growth is running at around 2 per cent (compared to 1.7 per cent expected for the UK this year) and unemployment is at its lowest since 2009.

That last statistic, at 9.1 per cent, is still double the rate of joblessness in the UK — reminding us that everything is relative in economic performance.