Whether you’re purchasing property overseas or importing stock, individuals and businesses lose thousands of pounds each year by not strategically planning their currency transactions. Timing your payments or locking in favourable exchange rates can make a significant difference.
While fintech platforms offer a convenient way to exchange currency, working with a currency expert can help you achieve far better results and save substantial sums.
Over the past decade, the British pound has lost 25% of its value against major currencies due to economic uncertainty, political events, medical crises, and Brexit. This devaluation has directly impacted the UK inflation rate, further highlighting the importance of strategic currency management.
By leveraging financial tools and expert advice, you can mitigate these challenges and achieve more for your money. Below, Suraj Gokani, founder of Currencies 4 You, shares actionable insights and proven strategies to help you navigate the complexities of currency exchange. With 21 years’ experience in financial markets Suraj shares his top tips on how you can save money when making international payments.
Recent Currency Volatility and Its Impact
In the last three months, the pound has experienced significant fluctuations:
Fell against:
- US Dollar (USD): -3.7%
- Arab Emirates Dirham (AED): -6.7%
- Canadian Dollar (CAD): -2.2%
- Indian Rupee (INR): -4.7%
Gained against:
- Euro (EUR): +2.2%
- Swiss Franc (CHF): +3.1%
- Japanese Yen (JPY): +4.3%
These shifts are not trivial. For instance, exchanging £100,000 for USD during a 3.7% drop would cost an additional £3,700, while the same exchange for AED would cost £6,700 more.
Key Events Driving Currency Trends
Autumn Budget 2024
The recent UK budget caused a sell-off of the pound as concerns grew about rising borrowing levels and increased taxes, weakening investor confidence.
Weak GDP Growth
The UK’s GDP grew by just 0.1% in the previous quarter, falling short of analysts’ 0.5% expectations. This sluggish growth contributed to a decline in the pound’s value.
Brexit Fallout
The initial shock of Brexit caused an 18% overnight drop in the pound as the UK struggled to secure trade deals with the EU, the world’s largest single market.
Top Tips to Protect Against Currency Risk:
- Consult an Expert
Currency market analysts can monitor trends and provide tailored strategies to time your transactions, ensuring you get the best possible exchange rate.
- Use Forward Contracts
Lock in your exchange rate for up to two years with a small deposit. Much like fixing a mortgage rate, this protects you from negative market fluctuations, offering stability and peace of mind.
- Leverage Market Orders
Set automated orders to execute currency purchases when your desired exchange rate is reached, ensuring optimal value.
- Utilize Stop Loss Tools
Protect yourself by setting a minimum exchange rate. Even if the market declines further, your currency will be secured at your pre-set rate.
5. Act Early
Avoid leaving your currency transactions to the last minute. Speak with an expert to identify favourable trends and plan your exchange strategy in advance.
Why Choose Currencies 4 You?
With 15 years of industry expertise and a global turnover exceeding £3 billion, Currencies 4 You saves clients approximately £15 million annually by helping them strategise and hedge their currency transfers.
Whether you’re a business or an individual, a simple phone call to their team can help you significantly reduce costs on international payments.
Arrange a free consultation today to explore how you, can start saving money on your currency exchanges: https://www.currencies4you.com/luxurist/
