The GBP/EUR reaches a 2-year high!

The GBP/EUR exchange rate has reached a 2 year high, currently standing at 1.1969. This is the highest rate since April 2022, breaking through the 1.19 threshold and approaching 1.20. But how long will it stay there? Unfortunately, no one has a crystal ball.

For those in the process of completing a property purchase in France and paying completion funds, it might be wise to consider your financial options. With interest rate data expected in the next two weeks, and the rate being the highest we’ve seen in a while, it might be a good time to mitigate some risk from the currency exchange element of your payment.

What does this mean for you?

On the 7th August of this year, a property worth €500,000 would have cost £430,923. Today, that same property will only cost you £416,805, in less than a 3-month period. This is great news for those currently budgeting for a home in France, as they will find their budget has increased slightly.

At this point, those in the process of completing their property purchase may want to consider making the most of this market movement. This is where the expertise of a currency specialist can be very helpful. They can help you lock in a rate ahead of your payment (forward contracts may require a deposit). This means if the rate moves unfavourably before your completion, you won’t be affected by the movement.

How can you make use of this market movement?

Using a currency specialist opens the door to many options. It gives you access to competitive exchange rates and the expertise of experienced foreign exchange professionals who can help you plan your transfer to make the most of your money. They understand your situation and support you by tracking the rate and guiding you on the best time to trade, helping to make your money go further.

Here are a few tools available to you and how they can benefit your currency exchange:

· Spot contract: An agreement between you and your FX provider to exchange money and buy foreign currency at the current exchange rate. This is the most common and traditional form of currency exchange, suited to addressing any imminent currency transfer needs you might have.

· Market order: Using a market order, you can target a rate of exchange, and if that rate is hit, the funds can be bought automatically or with your permission. Similarly, a limit order can protect your transaction if the rate falls below a certain level. This suits those with flexible timing who are optimistic that the rate might improve within their timeframe.

· *Forward contract: This allows you to fix a rate of exchange up to two years in advance of payment. This tool is popular among property buyers as it allows them to fix the full price of the property ahead of completion, giving them peace of mind and certainty about how much they will pay. It is also a great way to take advantage of a positive rate movement (note that forward contracts may require a deposit).

To take advantage of the exchange rates, it is key to plan in advance and get in touch with a currency specialist early in the process.

At Moneycorp, you will get assistance throughout your journey, from the moment you start looking for a property and planning your viewing trips to when you secure a property and have to pay the deposit and plan for completion.

Getting familiar with the exchange rates will help you set up your budget prior to putting in an offer. Contacting a foreign exchange specialist will help you understand your options and protect your budget from negative fluctuations – at no cost to you.