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Managing international money transfers

For those with exposure to different currencies, currency is an important consideration.

With Brexit, COVID-19 and interest rates in the mix, what lies ahead for the currency markets? Our colleagues at Smart Currency Exchange share some insights.


Between 6 and 11 September Sterling weakened by 4% against both the Euro and US Dollar. This wasn’t the biggest single-working-week loss of the year, as in successive weeks at the start of the COVID pandemic it fell by around 7% each time. The 4% loss was entirely Brexit related, but EU trade talks are far from being the only game in town over the next quarter. So, what will be moving the market in the run up to Christmas?


For estate agents in parts of France and Spain, the rush of British would-be expats to achieve residency before 31 December – and thus avoid the need for a visa – is building. Yet there is still time to get the paperwork done as France has extended the window until next summer (although you do need to be living there by 1 January 2021).

As things stand it’s still unclear whether the UK will get a trade deal, even a ‘thin’ one, which seems the best we can hope for now. In the case of a chaotic exit from the EU at the end of the year, Sterling would be expected to fall significantly. It’s possible that an element of that is ‘priced in’, but most analysts believe it will come as a shock. Could parity with the Euro be possible? Some believe so.


In their most recent deliberations the Bank of England’s Monetary Policy Committee voted unanimously to hold rates at 0.1%. However, the Bank added that it was “consulting” over the practicalities of negative rates.

If this happens it will be likely to push Sterling down further. Equally, having signalled the possibility, if next month the Bank shies away from the plan, Sterling could be boosted. That’s the nature of currency speculation and why we never encourage it!


So much of the economy is still deep frozen, from tourism to transport to entertainment and hospitality, that it’s hard to imagine that this will not affect Sterling – except that every country is in the same boat. Indeed, the UK is in better shape than many.

Traditional indicators of economic performance, from GDP to those arcane sounding bits of data like “non-farm payrolls” and “purchasing managers’ indexes” that currency speculators seize on, only go so far in determining the health of an economy in the current situation. So, while UK inflation was far lower than expected in the year to August, this was skewed downwards by the success of the Chancellor’s Eat Out to Help Out scheme.

While it is hard to read exactly how the economy is doing, any signs that the slump will be short-lived will be eagerly seized on and see Sterling rally.


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Despite his lead in the polls we cannot yet say that a Biden victory in the presidential election is priced into GBP/USD or EUR/USD. Neither can we say which way a Biden or a new Trump presidency would send Sterling.

But we do know that potential political chaos in early November could further weaken the US Dollar, which has already fallen by around 10% against EUR in the last year.

Wherever such losses come from, they translate into a significant risk for anyone who is transferring significant amounts of money. Even riskier is where there is a gap between agreeing a purchase overseas and actually making the payment.

It’s the same in any scenario where your income is in one currency and your expenditure in another. As a result, we always recommend a “safety first” strategy in which plans are explored and an appropriate currency strategy decided upon, including hedging where appropriate.

For expert guidance on currency markets or help with transferring money overseas, request a free account with Smart Currency Exchange online or contact your nearest The Fry Group office.

The Fry Group works with currency experts, Smart Currency Exchange, who continue to work normally throughout the crisis. If the team can offer help to you, please contact them via this link.

Please do remember market turbulence is to be expected. Nevertheless, the current situation will undoubtedly feel difficult to navigate. We are here to help. If you have specific queries please contact our financial planning team

The above commentary aims to provide information. However, this is not intended to form professional advice nor should it be relied upon as such and before taking any particular action, specific and personal advice should be obtained.