When transferring money to Spain it’s important that you get as many euros for your pounds as possible. Transferring your currency overseas – whether you’re paying for a property deposit, making regular mortgage transfers or transferring any sum of money between your bank accounts – is often left to the last minute, which can cost you thousands of pounds due to currency fluctuations.
Timing your transaction is key
Never underestimate the value of a good exchange rate. Currency markets are constantly fluctuating and making your transaction at the right time can make a big difference to the amount of money you end up with.
For example, if you were buying an apartment on the Costa del Sol worth €150,000, transferring your pounds on the dates specified below, the property would have cost you:
* 28 January 2010: £129,310
* 01 March 2010: £137,299
That’s a difference of £7,989 in just over one month!
Currency experts like Moneycorp can tailor their services to suit your needs to make sure you trade when exchange rates are in your favour.
A forward contract is just one of the services a currency broker can provide to clients making international money transfers. You book to buy or sell your currency in the future, at a rate you fix today. Forward contracts can help protect against adverse currency movements and can be used to lock into favourable exchange rates.
Update on the euro from Moneycorp
Since November the pound has been wandering, more or less aimlessly, along a six-cent wide channel three cents either side of €1.1250. In November and December the action centred on €1.11. In January and for most of February the focus was €1.14 and the end of February it dropped to €1.10. March has seen a catch-up process during which sterling has recovered to the middle of its four-month range.
The lack of direction suggests a steady relationship between the pound and the euro but it would be fairer to describe the alliance as a marriage of inconvenience. For the euro and the pound the underlying problems are the same ones that have dogged them since the end of last year; debt and politics.
The common thread throughout has been the way investors have been following the opinion polls. The more level the reading for the main two parties, the more investors shrink from buying sterling. They see a real danger in an election result that leaves neither with a working majority. The chancellor's budget on 24 March was plainly a piece of election theatre. No-one can be in any doubt that there will be another budget after the election. Investors seem relaxed about that postponement as long as somebody wins. Two hands - or more - on the nation's financial tiller would be a scarier prospect.
The woes of the euro stem almost entirely from the maladministration of previous Greek governments. In a situation dating back to Greece's fudged membership of the euro (many said at the time it should not have gone ahead) the Athens government of the day used financial derivatives to conceal the true scale of its indebtedness in order to meet the Maastricht criteria for euro membership. The EU Commission would dearly love to put together a rescue package, funded within the euro zone. Chancellor Merkel and the German populace disagree. After weeks of negotiation and several reported 'agreements' there is still no common ground in Brussels.
That one could run and run, and the UK election campaign will certainly run until 6 May. A benign UK election result and resolution of the Greek drama might level the playing field for the pound and the euro but the chances of both happening at the same time are remote. Whoever sorts out their problems first will be the currency winner, if only in the short term.
Trust Moneycorp to take care of all your money transfers to and from Spain; however small or large. Their experts make the process quick, easy and highly cost-effective.
Written by: Moneycorp
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For more information about how Moneycorp can save you money when sending money abroad, please visit the dedicated Eye on Spain/ Moneycorp website.
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