Save money on international transfers
Stock markets have provided an interesting if not slightly stormy narrative to the beginning of 2016, and many City commentators are forecasting more of the volatility that was so prevalent during last year. If this proves to be the case currency markets are likely to be a bit choppy too.
Sterling weakness
Just like stock prices, currency markets are sensitive to economic and political news flow. Yet foreign exchange rates can have an even bigger impact on the day-to-day running of a business in a world where technology has facilitated more and more cross-border trade. This is well highlighted by sterling’s start to this year. In the first half of January the pound had already slipped over 3% against both the euro and the dollar (its decline taking it to a five and a half year low against the dollar).
While disappointing UK industrial output figures for November are partly to blame for sterling’s fall, there are a broad range of factors at play. This makes it somewhat impossible to make accurate predictions for the future. The euro weakened against the pound for much of last year, so it is not unreasonable to assume that many buyers are taking advantage of the euro’s relative strength. And as confidence in Eurozone recovery increases, the euro could well strengthen further against the pound during 2016.
Falls in sterling’s value can support those businesses exporting products and services abroad however, as their goods become cheaper to international buyers. But it is not good news for every business. A drop in the pound’s value puts cost pressures on any company that imports raw materials from abroad, for example. The pound’s recent fall against both the euro and the greenback certainly serves as a reminder that such businesses need to be clever about how they make and receive international payments as any fall in the value of sterling can translate directly into an increase in costs.
This certainly highlights the need to consider and plan for such currency movements. After all, for many SMEs a sharp, unexpected currency fluctuation (such as the 3% fall in value highlighted earlier) can pose a real threat to their ability to trade.
It is not only business that are affected by currency movements. Individuals are often hard hit too as people need to send money overseas for all sorts of reasons (such as buying and selling international property) or converting a salary from one currency to another.
Aside from fluctuations though, there is another big factor that influences the exchange rate that a business or an individual receives. The good news is that it something that is within our control.
Are you getting a good exchange rate?
Using a high street bank to make international payments may appear to be the most convenient option. But you could be paying far more than you bargained for. For some business owners it surprising to learn that the typically unfavourable exchange rates received from a high street bank might mean that an international transfer could be costing up to 4% more.
Making an international transfer with a foreign exchange specialist can be far more cost-effective on the other hand. This is one of the reasons CityAM has partnered with foreign exchange experts Moneycorp, to bring you CityAM International Payments.
The service provides you with access to exchange rates that typically beat what you can get from many high street banks by around 3-4%. If you consider what this means on a transfer of £100,000 then it could equate to a saving of up to £4,000. These competitive exchange rates are naturally attractive to many of Moneycorp's business and personal clients who could be transferring significant sums across international borders.
The service also offers the piece of mind that your currency affairs are entrusted to a credible provider, who will allocate a dedicated account manager that will spend time getting to know your needs. You may have seen Moneycorp at major airports, and last year alone the company conducted around 8.1 million currency transactions. Moneycorp is authorised and regulated by the Financial Conduct Authority for the provision of payment services.
For competitive rates and the exclusive CityAM offer of free online transfers, call free on 0808 115 3718