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Currency Focus Buying euros for your French property purchase, international mortgage or pension transfer. Alexander Wright - HIFX, March 2005

The graph shows the cost of 100,000 euros during 2003. What will the story be in 2005? For anyone planning a property purchase in France, watching the exchange rate will become a habit. We have already seen significant activity with initial euro strength during January, most notably against the US dollar. Sterling has also strengthened against the dollar (to the highest levels since 1992) but recently the Pound has hit 1.50 euros, the best rate for over a year. What does all this mean? It means you should be careful not to be caught napping!

There are many analysts whose business is to comment on and predict future trends but no one has a crystal ball. On this basis it is always best to play safe. When buying property the sums involved are significant so a 5% move in the currency price will have a major impact on the cost of your French property. This could be good or bad depending on the direction of the rate move. Equally, if you have an international mortgage the sterling cost of the monthly payments will vary in line with currency volatility.

Windsor based currency brokers HIFX process large volumes of private clients buying assets abroad (it doesn't have to be a property as currency markets don't distinguish between houses, boats, art or furniture) and client's concerns are always the same: "When is the best time to buy my euros?"

The only prudent advice is to fix an exchange rate when you agree to buy the house. This will fix your costs and ensure your budget stays on track. The majority of analysts still expect the pound to continue its devaluation against the euro in 2005 but as mentioned above, they don't always get it right. Also, even if they are right, nothing ever happens in a straight line so there will always be a few peaks and troughs along the way. If you have a series of payments to make you might choose to secure a rate for the first one or two and use HIFX to monitor the rate for the remainder. If you do this it is just as important to establish a high and low target so that you cut your losses if the rate starts to fall.

Sending regular payments to France
Sometimes it's not just the cost but the stress factor which requires a solution. HIFX can now process regular payments overseas. Let us suppose you have a euro mortgage payment of EUR 1000 per month. We will fix an exchange rate for each monthly payment and then give you the average exchange rate for the whole year. This means that you have the same sterling cost each month. Using a direct debit we will transfer the Euros abroad each month with no transfer fee. This not only makes financial sense but makes it virtually stress-free (one the initial arrangements have been completed). Pension transfers would work in the same fashion and, being potentially greater in size, will generate significant savings over the course of many years

To monitor the exchange rate, use the HIFX currency converter: www.hifx.co.uk/cc
or call 01753 859159.
Mention 1st For French Property to speak with a senior HIFX consultant.

The details expressed in this article and graph are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. HIFX Plc accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information. 

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