Exchange Rate News

Living in France with the weaker pound – what to do

The British Pound has had to endure an absolutely torrid time over the last six months.

In fact, since around March 2008 we remained within a trading range of high 1.2900’s to lows of 1.2200 right up until November 2008. Having broken through the 1.2000 level the pound plunged toward parity with this move stopping just shy at 1.0200 on the 30th Dec 2008. This fall was not helped by the continual talk of a run on the pound and talk from the Confederation of British Industry forecasting that the UK economy will contract the most it has done in almost three decades.

The pound recorded an overall decline of 23% against the euro during 2008, and the resulting exchange rate did caused some British property investors to delay purchases in France for the time being, in the hope of a long awaited change in the fortunes of the pound. Since the end of January however, we have seen the pound spike up from 1.0500 to a high of 1.1350 on the 1st of February, and we are seeing that level out at around the 1.10 – 1.11 mark now. This move should help those wishing to buy property in France, and proves that there is a somewhat positive light at the end of the tunnel.

Top tips to protect your spending power in France

With the pound continuing to lurk in the current climate, and a large proportion of the French property market suffering as the rest of Europe are, it’s more important than ever to protect your spending power. If you’re buying a property in France, emigrating there, or even already live there and need to move money from the UK, the following tips can really help bolster your bank account, and squeeze the most out of your Sterling.

1) Shop around

Look for the best deal, as you would for your car insurance. Don’t assume that your high street bank will offer you the best deal. Currency specialists will probably save you money by offering you better rates of exchange and lower transfer fees. Savings of 2% and more on exchange rates and £10 to £20 per transfer on transfer fees are very realistic (£120 to £240 per year if you’re making monthly payments).

2) Plan ahead

Currency markets fluctuate constantly and if you simply wait until you have to make a payment, you will get the exchange rate of the day and will have run the risk of markets turning against you. If 6 months ago you knew you had to make a payment in Euros around this time but had done nothing to secure your exchange rate, the payment would now cost you 20% more.

3) Get expert guidance

Currency market expertise is no longer restricted to bank trading floors. Currency specialists have teams of trained and qualified dealers who can help consumers and SMEs alike through the minefields that are the currency markets.

4) Don’t get stung by overseas banks

Be aware that overseas banks can often charge handling fees just for receiving your money. This can amount to up to 1% of the value of your transfer and can soon add up dependent on the amount of money you are sending or the regularity of your transfers. You can possibly negotiate with the receiving bank before sending your funds or currency specialists can also help.

5) Consolidate your payments

If you are sending money regularly, think about reducing the number of payments that you make and increasing the size of these payments. This will reduce transfer fees. However, you should also take steps to protect yourself from adverse exchange rate movements.

Information supplied by Rudi Kilchherr, account manager at Moneycorp, 100 Brompton Road, London, SW3 1ER Web: www.moneycorp.com Tel: +44 (0)20 7589 3000 Worldwide copyright © TTT Moneycorp Limited 2008.

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