Great opportunity for those buying Euros

With Sunday’s announcement of a French snap election, coupled with the European Central Bank’s decision to cut interest rates, the Euro has weakened off making it a good time to purchase.

France’s president Macron called a snap general election on Sunday after his centrist coalition was heavily defeated by far-right Marine Le Pen’s National Rally in the European elections. Opposition Marine Le Pen’s National Rally party won more than double the votes of Macron’s allies and with three years left in Macron’s second term as president, if the election doesn’t go in his favour, it could heavily complicate policymaking in France.

To add to this, the decision from the ECB last Thursday to cut bank rates by 25 basis points will not be helping any claims of the Euro returning to previous levels of strength. The cut was based on an updated assessment of inflation. Since the Governing Council meeting in September 2023 inflation has fallen by more than 2.5 percentage points and the inflation outlook has improved markedly.

These political and economical factors have seen the pound hit a 22-month high against the Euro, breaking the 1.18 level and reaching highs of 1.1870. The Pound has now gained over two cents against the Euro in the last two months.

For US buyers, we have also seen the Dollar strengthen against the Euro for similar reasons, but aided additionally by the surge in non-farm payrolls released last Friday, which triggered a Dollar jump across the board. The data showed 90,000 more people had been employed during the previous month than had been forecasted for, and since this release we have seen USD/EUR jump from 0.9175 to a high of 0.9315, also benefitting those buying Euros.

What can you do to take advantage of these rate movements and make future ones work for you?

Using a currency specialist opens the door to a multitude of options for you. You have access to a competitive rate of exchange and the expertise of a currency specialist whose role is to help you plan your transfer to make the most of your money. They will understand your situation and support you by tracking the rate and guiding you on when is the best time to trade, making your money go further. Here is an example of a few of the tools available to you and how they can benefit your exchange:

• Spot contract- A spot contract is an agreement between you your FX provider to exchange money and buy foreign currency at the present exchange rate. This is the most common and traditional form of currency exchange and is suited to addressing any imminent currency transfer needs you may be.

• Forward contract- This allows you to fix a rate of exchange up to two years in the future in advance of a payment. This tool is very popular among property buyers as it allows them to fix the whole price of the property ahead of completion giving them the peace of mind and the certainty of how much they are going to pay for the property. But it is also a great way to take advantage of a positive rate movement. (Please not forward contracts may require a deposit)

• Market order– you could target a rate of exchange and if that rate is then hit, we could either buy the funds for you automatically, or notify you for your permission to buy. With the same principle we can set up a limit order to protect your transaction in case the rate falls below a certain level. This suits those who have some time on their hands and are optimistic that the rate might improve within their time frame. One of the advantages of the

Bear in mind that the rate can move in any direction, and you can utilise these tools available to you to protect your budget. The sooner you get in contact with a specialist, the more time you must plan your transaction, save money on the rate and remove the risk of currency fluctuations.