Exchange rates can heavily influence the cost of buying property overseas. To maximise your budget, we’ll break down the benefits of using market orders, a currency tool available from foreign exchange specialists like Moneycorp, to help you target a favourable exchange rate.
Exchange rates are always fluctuating, especially during significant events. For instance, in 2023, the GBP/EUR rate fluctuated between 1.1775 and 1.1135. To put this in perspective, the difference in price at these rates on a €500,000 property would be more than £24,000. Last year, volatility was relatively low; in 2022, the difference between the highest and lowest rates would have made a difference of nearly £51,000.
Here are our Top Tips for using Market Orders
1) Use Market Orders if you’re optimistic about the exchange rate: Market orders help you benefit if the rate moves in your favour. You agree on an exchange rate higher than the current one, and when that rate is reached, your order is automatically fulfilled. This is useful when rates change quickly, letting you act without constantly monitoring the market.
2) Make sure you stay informed: Monitor factors like interest rates that influence exchange rates. Decisions from central banks, like the Bank of England, can affect currency values. Staying informed helps align your currency strategy with potential rate movements. Rates can change in seconds, so it’s essential to be ready. Opening an account with a currency specialist like Moneycorp early on can give you access to expert guidance on the factors that can affect the market and tools to monitor rates.
3) Help protect your budget with a Stop Loss Order: Combine market orders with stop limit orders to manage risk. This protects your transaction from going below a specific rate, which is useful if you have a specific budget range.
4) Explore other tools to find what’s right for you: How you approach your currency transfers when buying a property abroad will depend on how much risk you are open to. If your budget is tight or you can’t afford a change in the rate, you might opt for a forward contract, which allows you to fix the exchange rate as soon as the purchase is agreed upon. This will ensure the property’s price is not affected during the months between deposit and completion.
On the other hand, as we mentioned earlier, if you are more optimistic about the rate moving in your favour, then a Market Order may be more appropriate. Each option has its pros and cons and offers different levels of certainty.
5) Start planning early: Property transactions often take time and exchange rates are constantly fluctuating. That’s why it’s essential to plan ahead and secure dedicated support with a reliable service to exchange your money at the beginning of the process – so you don’t get any nasty surprises.
Using currency tools and getting support from an expert can help you get the most from your property budget. Whether seizing opportunities or managing risks, the key is to stay informed, plan ahead, and get guidance from currency specialists. Open an account early, explore your options, and make the most of your property investment with a well-thought-out currency strategy.
How do market orders work?
- With a Market Order you agree rate of exchange that you want to target – this will be higher than the current market rate – if it is reached, your order is automatically fulfilled, and your Euros are bought at that price.
- A market order allows you to take advantage of a rate movement even if this happens quickly, briefly or outside of normal working hours.
- Remember, once the order is fulfilled, you won’t be able to change it. This means that if the rate moves even higher after your level has been reached, you won’t be able take advantage of it.
- You can combine a Market Order with a Stop Loss Order that allows you to protect your transaction from going below a certain rate.
With a Platinum Trusted Service Award 2020 from independent review site Feefo and 40 years of experience in the industry, FrenchEntrée has been recommending Moneycorp for more than 15 years. During this time they have helped thousands of client planning the best way to pay for their property as well as supporting them afterwards with any further payment from paying bills, mortgages to repatriating UK pension payments for those who have retired to France.
Furthermore, we have worked with the same person at Moneycorp for more than a decade! You might be familiar with her as she often writes for our French Property News magazine. She has 13 years’ experience in foreign exchange, and is a qualified European lawyer with experience in European transactions. Mar will be happy to answer any questions or enquiries to support you through these difficult times
Opening an account is really easy and free of cost. You can register online or over the phone in a couple of minutes and for FrenchEntrée readers there are no transfer fees in any payment.
*Forward contracts may require a deposit
Beware of currency risk. None of the information contained in this article constitutes, nor should be construed as financial advice. TTT Moneycorp Limited (company number 738837) is registered in England. Its registered office is at Floor 5, Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ. Moneycorp is a trading name of TTT Moneycorp Limited which is authorised and regulated by the Financial Conduct Authority for the provision of payment services (firm reference number 308919). Date of Approval: 06/02/24
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