How the pound performed in 2013

In the past year the pound has outperformed the majority of major currencies. Here is where it's been worth the most.

The pound had a strong year in 2013, outperforming many major currencies.

Sterling rose against 53 of 74 currencies analysed in new research. Improved economic conditions in the UK are the main reason for its strong performance.

The biggest difference was seen in South America, and Venezuela in particular, where the bolivar fell by 48% against sterling. This is largely due to high inflation and a large budget deficit in South America.

Let's take a look at the other currencies it rose against in 2013.

Long-haul holiday boost

The Argentinian peso was the next worst performer against the pound, dropping 27.7%.

In third place was the kina in Papua New Guinea, with a 26.3% drop, with the Japanese yen, which went down by 24.7%, in fourth.

Of the 74 currencies included in the report from Lloyds Bank, 14 have fallen by more than 10% against the pound since November 2012. And that's been good news for holidaymakers, who've benefitted from more spending money.

But because most of the poorest performing countries were located outside the European Union, the travel costs mean the total holiday bill will still have been quite expensive.

*source: Thomson Datastream

Currencies outperforming the pound

A number of currencies did better than the pound in the past 12 months. Top of the list, rising by 7.2% against sterling, were the Seychelles rupee and Israeli shekel. The Romanian leu was also up 5%, while the euro increased by 3.5%.

*source: Thomson Datastream

Don't get ripped off when using your credit card abroad

The UK versus the G20

The pound outperformed 13 of the 16 currencies included in the G20 group of economies,.

The Australian dollar fell 15.7% against sterling, the South African rand dropped 15.6%, the Russian rouble fell 7.3% and the Canadian dollar dropped 7%.

Nitesh Patel, economist at Lloyds Bank, said: "Improving economic news has been one of the key drivers behind the general rise in the value of the pound, although some of the appreciation can also be explained by the fact that markets have lowered their expectations for US and eurozone official interest rates by more than they have for UK rates in recent months."

Earn cashback when booking your holiday

How to make your holiday money go further

Working out where you will get the most for your money is a sensible move when deciding where to go on holiday. But you also need to ensure you don't get ripped off when exchanging your cash. There are many different ways to switch your money and they all come with different fees to keep on top of. For more read Foreign currency exchange: don't get ripped off on your travel money.

Alternatively, if you're planning on using your debit or credit card for your spending, make sure you use a card that won't wallop you with massive fees. Check out The best credit cards to use on your travels.

Currency isn’t everything. Other factors, such as the flight and accommodation costs, will need to be factored in. But if you were already planning a long-haul holiday, checking the countries where you’ll get most bang for your buck is one way to cut your holiday costs.

Read The best websites for bargain holidays

Compare travel insurance policies with lovemoney.com

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