The GBP/EUR exchange rate is currently at the highest rate we have seen since August 2022, breaking through the 1.16 threshold and nearing closer to 1.17. But how long will it stay there? That is the million dollar question.
For those currently in the process of completing on a property in France and paying your completion funds, they may want to consider their option when it comes to their finances. With interest rate rise data coming out in the next two weeks, and the rate being the highest we have seen for a while, it might be a suitable time to remove so risk from the currency exchange element of your payment.
What does this mean for me?
This time last week a property worth €250,000 would have cost £219,548. Today, that very same property worth €250,000 will only cost you £214,279.
Even better for those currently looking at their budget for their home in France, they will now find that budget had increased a little.
At this point, those in process of completing on their property may want to consider their options of making the most of this market movement.
This is where the expertise of a currency specialist can be very helpful, as they give you the possibility of locking in a rate ahead of your payment (Forward contracts may require a deposit). This means, if you have some time before your payment is due, and you wanted to take advantage of the current rate, you can do so using a currency specialist. This would mean if the rate was to move out of your favour during those few months before your completion, you will not be affected by the movement.
What can you do to make use of this market movement?
Using a currency specialist opens the door to many options. It gives you access to competitive exchange rates and the expertise of experienced foreign exchange professionals whose role is to help you plan your transfer to make the most of your money. They understand your situation and support you by tracking the rate and guiding you on the best time to trade, helping to make your money go further.
Here are examples of a few of the tools available to you and how they can benefit your currency exchange:
- Spot contract- A spot contract is an agreement between you and your FX provider to exchange money and buy foreign currency at the current exchange rate. This is the most common and traditional form of currency exchange and is suited to addressing any imminent currency transfer needs you might have.
- Market order- Using a market order, you can target a rate of exchange, and if that rate is then hit, we could either buy the funds for you automatically or notify you of your permission to buy. With the same principle, we can set up a limit order to protect your transaction in case the rate falls below a certain level. This will suit those with flexible timing and who are optimistic that the rate might improve within their time frame. One of the advantages of the market order is to ensure that the currency is bought at the desired level, even if the market only touches that level very briefly – including when the markets are closed for trading.
- Forward contract *- This allows you to fix a rate of exchange up to two years in the future in advance of payment. This tool is very popular among property buyers as it allows them to fix the full price of the property ahead of completion, giving them peace of mind and the certainty of how much they are going to pay for the property. But it is also a great way to take advantage of a positive rate movement. (Please note forward contracts may require a deposit.)
In order to take advantage of the exchange rates, it is key to plan in advance and to get in touch with a currency specialist such as Moneycorp early in the process.
It is never too early. At Moneycorp, you will get assistance throughout your journey, from the moment you start looking for a property and planning your viewing trips to when you secure a property and have to pay the deposit and plan for completion.
Getting familiar with the exchange rates will help you set up your budget prior to putting in an offer. Contacting a foreign exchange specialist will help you understand your options and protect your budget from negative fluctuations – at no cost to you.
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.
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