Currencies are always moving, with the pound to euro exchange rate ranging from lows of €1.11 and highs of €1.17 in the first six months of 2023 alone.
Such big shifts can make it particularly difficult for expats moving money to and from Spain. For instance, if you were transferring £200,000 to buy a property in Spain, that six-cent change in the first half of 2023 would amount to a €12,000 difference in the amount you receive.
Fortunately, there are ways you can protect yourself from currency volatility and get a great exchange rate on your money transfers to Spain.
Here, we cover what’s been happening in the pound euro pairing over the past month along with actionable tips on how to find the best time to transfer money.
What’s happening in the markets?
Looking at the GBP/EUR exchange rate over the past month, we’ve seen the pound fall from a one-month high to a six-month low against the euro as investors grew increasingly concerned of a looming UK recession.
However, the Eurozone is also facing a downbeat economic outlook, and this led to volatility in the single currency. More troubling data from both economies could see GBP/EUR continue to fluctuate in the coming weeks.
Looking further ahead, mid-December could bring more volatility, as both the Bank of England (BoE) and the European Central Bank (ECB) meet to set interest rates.
Monetary policy has a significant impact on currency value, so GBP/EUR could face turbulence as investors react to the BoE and ECB decisions. Both banks are likely to leave interest rates unchanged, which may weigh on the respective currencies.
Staying up to date
Keeping on top of what’s happening in the currency markets is one of the key ways to avoid unfavourable exchange rate movements, as this can help you time your money transfers effectively.
Thankfully, you don’t have to spend hours poring over charts and tables to know what’s happening with exchange rates. You can sign up with a specialist currency broker – such as Currencies Direct – for free market updates and insights from their analysts.
With Currencies Direct, you can also set rate alerts. Simply set a target rate and they’ll let you know if and when the market reaches that level.
Using a forward contract
Another way to protect your currency transfers from volatility is to use a forward contract.
A forward contract allows you to lock in an exchange rate for up to a year. It’s useful when the current exchange rate is strong but you aren’t quite ready to make a transfer.
By securing a strong exchange rate, you can budget knowing exactly how much money you’re going to get. And while you won’t benefit if the exchange rate improves, you will be protected from any negative movements in the currency markets.
Buying currency in advance
If the exchange rate is strong and you already have the funds needed for the transfer, you can buy currency in advance and hold it in an online account.
This means you can seize the opportunity when the market moves in your favour, potentially saving a lot of money by transferring at the right time. Your funds will then be securely held online, ready for you to easily access when you need them.
It’s important to note that this is only possible with a company that’s authorised to operate as an Electronic Money Institution (EMI) in the EU, so make sure that the currency provider you’re working with has the right authorisation.
For example, Currencies Direct is fully authorised as an EMI by the Financial Conduct Authority (FCA) in the UK and the Bank of Spain in the EU. This means that, as a Currencies Direct customer, you can buy currency in advance and hold it on account.
About Currencies Direct
Currencies Direct have been helping individuals and businesses save time and money since 1996 with excellent exchange rates and no transfer fees.
With a team of over 550 currency experts and 20+ branches across Spain, Currencies Direct are never far away when you need them.
They’ll keep you up to date with the latest market movements so you can pick the right time to move your money. They also offer a range of specialist services that can be tailored to your individual requirements.
If you have a currency requirement coming up, get a quote now to find out how much you could save.
This a Spotlight Advertising Feature in collaboration with Currencies Direct.
Sign up for the FREE Weekly Newsletter from Spain in English.
Please support Spain in English with a donation.
Click here to get your business activity or services listed on our DIRECTORY.
Click here for further details on how to ADVERTISE with us.
