When you send money to or from Spain, exchange rate volatility can have a big impact on your finances.
A seemingly small change in the GBP/EUR exchange rate can mean you end up with less money for your transfer, particularly when you’re sending larger amounts, such as for a property purchase.
However, keeping up to date with the currency market can make it easier for you to budget effectively and time your transfers for when the exchange rate is in your favour.
What’s happening with GBP/EUR?
The pound euro exchange rate has fluctuated over the past month, with the currency pairing strengthening overall, as political anxiety in the EU piled pressure on EUR exchange rates.
Sweeping gains for the far-right in the European elections and a shock decision by French President Emmanuel Macron to call a snap parliamentary election saw the euro plunge to a fresh 22-month low against the pound.
However, sterling then trimmed its gains as weaker economic data and cooling UK inflation fuelled expectations that the Bank of England (BoE) will soon start cutting interest rates.
The euro enjoyed support after the first round of the French election showed that the far-right National Rally (RN) party was unlikely to be able to win a majority. However, with the final results showing a hung parliament, EUR was stopped in its tracks.
Meanwhile, a Labour landslide in the British General Election lent the pound modest support amid hopes that the recent political uncertainty in the UK was at an end.
With the UK election over, the focus shifts to the BoE’s August policy decision. The bank could cut interest rates next month – a move that would likely see the pound weaken. However, if signs of sticky inflation give the BoE pause for thought then sterling may strengthen.
French politics could continue to impact EUR over the coming weeks, with the euro potentially suffering losses if the country faces a prolonged political deadlock.
Elsewhere, Eurozone inflation and the European Central Bank (ECB) decision could drive EUR movement. Will stubborn inflationary pressures see the ECB leave rates unchanged, thereby boosting the single currency?
Currency volatility when buying and selling property
The kind of exchange rate volatility GBP/EUR has experienced recently can have a big impact on your currency transfers, particularly if you’re sending large sums for a property transaction.
For instance, if the GBP/EUR exchange rate weakened by just two cents, you’d get €6000 less on a transfer of £300,000.
Fortunately, there are ways you can navigate this volatility and mitigate the risks.
If you work with Currencies Direct, we can provide you with regular market updates and expert insights to keep you up to date with the latest currency movements.
You can also use a variety of services to help you transfer your money when the rate is right.
A forward contract, for example, allows you to secure an exchange rate ahead of making a transfer. While you won’t benefit if the rate improves, you will be protected from any negative movements. And you can budget with certainty.
Meanwhile, a limit order allows you to target an exchange rate higher than the current rate. Your transfer is automatically triggered if the market reaches that level.
Saving money using PropertyPay
Another key consideration when buying or selling property abroad is the potential costs and charges associated with property completions.
Spanish banks tend to charge hefty fees for processing large sums of money, as well as for raising or depositing banker’s drafts for a property sale.
With our bespoke PropertyPay solution, you can avoid these fees as funds can be directly transferred between the buyer and the seller. There’s no need to involve third parties, such as lawyers or notaries, and you don’t need to raise or deposit a banker’s draft.
As well as potentially sparing you from costly bank charges, PropertyPay also simplifies the property completion. The service is 100% digital, allowing you to swiftly and securely exchange funds without the need for physical paperwork, bank visits, or other unnecessary delays.
Get in touch with Currencies Direct
If you want to find out more about PropertyPay, forward contracts, or any other part of our service then please do get in touch.
You can create a Currencies Direct account for free and start sending money in minutes, or talk through your currency needs with your own dedicated account manager.
We’re also fully licenced to operate as a currency provider in both the EU and the UK, so you can rest assured knowing your money is in safe hands.
Pop into one of our 20+ local branches dotted around Spain and speak to a friendly currency expert, or get a quote now to find out how much you could save when sending money overseas.
Alternatively, if you want to learn more about how PropertyPay could simplify your Spanish property journey and spare you from bank fees, email us at: propertypay@currenciesdirect.com.
This a Spotlight Advertising Feature in collaboration with Currencies Direct.
