The overriding focus this year has been on COVID-19 and the impact this has had across the globe. With the threat of the virus still strong and the recent announcement of further lockdowns in most European countries, including here in England from 5th November, the uncertainty in the markets are likely to continue.
However the end of year will be accompanied by some very relevant events that will most definitely impact the current exchange rates. Starting with the US election this week with no clear outcome yet. However, what we can see historically is the US dollar rises after every election so in either case the majority of experts believe that we could see the Dollar strengthen. The results are likely to cross borders and have and have an effect in the global market, so definitely one to watch out for.
And let’s not forget BREXIT. The four-year long journey must come to an end of the 31st December so we might see an agreement coming out from the next European summit in the second week of November.
Should you need to complete on your property purchase in the next couple of months or are waiting to make a payment, the uncertainty created by all these events could be overwhelming.
Deciding what do and when to do it will depend mainly on your risk threshold. But for those who are looking for certainty the best option might be to lock the exchange rate ahead of your payment via a forward contract.
This option has a clear advantage for those involved in a property transaction. By fixing the exchange rate you also fix the purchase price avoiding last minutes changes that could have really risky consequences.
What shall I consider when booking a forward contract?
- You don’t need to pay the full amount that you are fixing so it is an attractive tool for those whom might not yet have the full funds available. However you need to bear in mind that in order to fix the rate you will need to deposit 10% of the whole amount you are fixing. This is not a cost but just a deposit to ensure you will fulfil the contract when the payment date arrives.
- Once you fix the rate you won’t be able to change it. This means that if the rate moves even higher after fixing it you won’t be able to swap the fixed rate for the better rate.
- If you need to cancel the contract you might incur in a loss if the market has moved against you.
Forward contracts might not be available through your high street bank or your online provider however they are offered by well-established foreign exchange specialist such as moneycorp.
With a Platinum Trusted Service Award 2020 from independent review site Feefo and 40 years of experience in the industry, FrenchEntree 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 FrenchEntree magazine. She has 13 years experience in foreign exchange plus she is a qualified European lawyer with experience in European transactions. Mar will be happy to answer any questions or enquiries to support you through this 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 FrenchEntree there are no transfer fees in any payment.
Open a free account today by clicking here.
Contact moneycorp at 020 3773 6355 or send your enquires here.