December was another turbulent month for the pound to euro exchange rate, with the pairing trading between a low of €1.14 and a high of €1.16.
While a couple of cents might not sound like a lot, if you are making a larger transfer to or from Spain, this could result in a significant difference in the amount of money you receive.
If you were to transfer £200,000 to Spain this two cents difference in the GBP/EUR exchange rate would translate into a €4,000 loss if you moved your money when the exchange rate when it was weakest.
In this article we will be looking at how the GBP/EUR exchange rate moved at the end of 2023 and how it might move at the start of 2024. In addition to providing some tips on how you could protect your money from currency volatility and get a great exchange rate on your transfers to and from Spain.
What’s happening in the markets?
December saw the pound euro exchange rate strike a three-month high at the start of the month, before plummeting again as 2023 came to a close.
These swings in GBP/EUR were primarily linked to interest rate cut speculation. Both the Bank of England (BoE) and European Central Bank (ECB) sought to push back against speculation that cuts would begin in early 2024.
However, the BoE’s messaging was undermined by some lacklustre UK data, which lead GBP investors to bet that the BoE’s will cut interest rates by May.
Looking ahead, central bank monetary policy may continue to act as a key catalyst of movement in GBP/EUR at the start of 2024, but investors will also pay close attention to upcoming GBP and EUR data as they seek to gauge whether the UK or Eurozone slipped into a recession in the second half of 2023.
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.
Transferring with a currency provider vs a high-street bank
While your bank may be your first port of call when it comes to transferring money abroad, you are likely to find it is more cost effective to use a specialist currency provider.
In addition to offering more competitive exchange rates, currency providers won’t charge you the extra transfer fees that are often tacked on by high street banks. Meaning you could see immediate savings.
A bank will also only allow you to perform a Spot Transfer, where your money is moved immediately at the current exchange rate. Whereas currency providers can also offer additional services and support to help you to maximise the returns on your transfers.
However, a specialist currency provider like Currencies Direct will offer a range of additional transfer options which can help protect your money.
For instance, 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.
Or if you have time to hold out for a more favourable exchange rate you may want to consider setting up a Limit Order. With a limit order you can target an exchange rate stronger than the current market level. You simply set the exchange rate you want to achieve, and your transfer will be triggered automatically if your target rate is reached.
How Currencies Direct can help
Currencies Direct offer excellent exchange rates, expert support, and no transfer fees. We also have an exclusive deal with CaixaBank which means you’ll never pay receiving charges in any Spanish bank.
Our dedicated currency experts are on hand to keep you up-to-date with the latest market movements, giving you all the insights you need to time your transfers effectively.
Currencies Direct is also fully licenced to operate as a currency provider within the EU. So you know your money is always covered by the relevant authority.
Pop into your local branch and speak to one of our friendly currency brokers to see how much we could help you save when transferring funds to and from Spain.
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.