When we last went, in May, we took sterling to exchange for euros which, due to the fall of the pound against the euro, proved to be a very expensive holiday.

This time would it be better to take, say, dollars instead of pounds?

A A spokesman for currency exchange specialist Money­corp says: “Converting pounds into dollars to take to Cyprus to then convert into euros would be counterproductive. The market is balanced so this would never make sense — otherwise everyone would be doing it.

“If you bought dollars because they were cheap, you would then be buying euros with a weak currency, so that what you had gained with the first step you would lose in the second.

“Anyone qualified to carry out these currency conversions at the true interbank exchange rate — not available to most people — would break even.

“However, once you add in the spreads and margins that are part of normal currency exchange, you will always make a loss.

“The only way you could gain is by taking a punt on currency fluctuations, but not only does this mean you could lose, you might as well just do this from pounds to euros and cut out a second conversion altogether.”

If you have a financial problem or query, we can help. Every week, Money Matters will answer your questions with help from website CashQuestions.com.

Please write to Money Matters, Daily Express, The Northern & Shell Building, 10 Lower Thames Street, London, EC3R 6EN or email money.matters@express.co.uk.

You can also visit the CashQuestions.com website to have your question answered free by an expert. The site is owned and operated by three finance journalists backed by a group of financial specialists.

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