Will currency rates be affected by Brexit?
It still seems uncertain what kind of Brexit – if any – we are going to get… How significantly do you think currency rates could be affected by the different scenarios? J.R.
Yes, as unbelievable as it may sound, we still cannot say with certainty how it is all going to play out.
This uncertainty was only heightened after Theresa May’s Brexit deal was rejected by MPs though for a couple of weeks the pound did embark on an upward trajectory on the assumption that Brexit would have to be delayed, with the GBP/EUR exchange rate rallying to a 19-month high.
Sterling advanced on all major currencies as odds of a no-deal declined, but gave up some gains before the end of the month as May was given two weeks to renegotiate the Irish backstop – which the EU had already said was not up for further debate.
With time running out, further GBP volatility is likely. Fortunately, whatever the outcome, there are ways to protect your currency transfer with the help of a trusted currency provider. For instance, with a forward contract you can fix an exchange rate for up to 12 months, helping you budget effectively and defend your future transfer against any market volatility.
If you do not need to make a transfer immediately and wish to hold out for a better rate but do not want to risk losing out due to an unfavourable shift, you may wish to take advantage of market orders.
By targeting a best and worst case exchange rate with a Limit Order and Stop Loss Order respectively, you can take advantage of any favourable movements while minimising any potential losses.
Another service is rate alerts, where you tell the company what exchange rate you want to achieve and they let you know as soon as the market moves to that level by text or email.
Whatever the future of Brexit, you can find ways to help to minimise the impact of sudden developments on your currency transfers.
Question answered by Shaun Dash of Currencies Direct. For more information on international money transfers with Currencies Direct see www.currenciesdirect.com/france or call +33 (0)4 22 32 62 40
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