The pound this week hit its highest level against the euro since late 2009, which is good news for anyone planning a holiday in Europe in the coming months.

"Sterling has been appreciating, mainly against the euro, due to the well-publicised problems of the eurozone especially with countries such as Greece and now Spain," says James Hickman, managing director of Caxton FX, specialist currency providers.

"High level investors in currencies are shying away from the euro because of the risks involved. Meanwhile the UK is seen as a safe haven as it still has its triple-A rating from the credit-ratings agencies. This has pushed the pound to a two-and-a-half year high versus the euro, and we believe it will continue to appreciate over the coming months – even though there may be some blips along the way such as that which followed this week's economic news."

If you are not planning to visit the continent until July or August, Mr Hickman thinks you may get a better deal by waiting until nearer the time to purchase your currency, though he urges travellers not to leave it until the last minute. He says: "Don't wait until you are at the airport where the poor exchange rates you get could wipe out the advantage of the strong pound."

But in a world of uncertainty, some would suggest a bird in the hand may be better. According to foreign currency provider ICE, £500 will currently buy you €602.50, nearly €50 more than at the same time last year.

Tom Johnson, head of direct business at ICE, says: "Rates can change quickly so (holidaymakers) shouldn't assume the trend will continue upward. With so much uncertainty in the eurozone there are no guarantees where rates will go. Our tip would be to keep an eye on rates and buy when they look favourable, locking in a rate using a prepaid travel card."

The pound has not been strengthening against all currencies. Relative to the US dollar which has also been getting stronger, sterling is actually 1.3% down on a year ago, but the dollar is not expected to rise much higher. One currency that has become even cheaper relative to the pound than the euro is the Croatian Kuna. Holidaymakers will get 10% more than they did in June last year when they buy Kunas.

One reason why sterling could start to weaken again is that while its current strength is helping to push down the rate of inflation, as well as helping holidaymakers, it is not good for UK exporters.

Jim Leaviss, head of fixed interest at funds group M&G, pointed out this week: "The strong pound will help send inflation below 3% during the course of the year, but at the expense of economic growth and a rebalancing of the economy towards manufacturing – just look how Germany has benefited from the weak euro."

As a result, Leaviss suggests that the Bank of England might want to join nations like Switzerland, Japan and Norway in actively selling their currency or talking it down. A reduction in the UK's credit rating, which was put on negative watch by Moody's in February, might have a similar effect.

For anybody who would rather take advantage of the pound's current strength and buy their euros or US dollars in advance, prepaid currency travel cards are a convenient tool.

Currency cards have really come to the fore over the past year or so, and have effectively replaced travellers cheques.

They can be obtained online from companies such as FairFX, CaxtonFX or ICE, or over the counter from the Post Office. You can preload them online or over the phone, typically in minimum amounts of £50 or £100, any time you want before or during your holiday. They can then be used to pay for goods and services while you are away, and to withdraw cash from ATMs.

Mr Hickman argues: "The advantage of prepaid currency cards if you are buying euros or US dollars is that you know exactly how much you are paying for everything because you know the rate at which you bought your currency. If you use an ordinary debit or credit card, you don't know what exchange rate has been used until you receive your credit card or bank statement."

Currency cards are "chip & pin" protected, so no one else should be able to access your funds if your card is lost or stolen. ICE also allows holders to have free additional cards so if the primary card is lost, an additional card can be activated.