Le Tour de Finance Q&A

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Throughout the course of our 120 past events, we have received numerous questions from attendees on various subjects. Below, you will find a selection of this questions and answers

I receive a regular income that I need to transfer to France and I am wondering how I can fix a rate in advance and how long for? Am I able to protect myself from potential losses if markets move in the wrong direction?

Along with large transfers for property purchase or sale, regular payments are one of the main reasons for which expats transfer money to or from France. And, if making the right decision is essential when sending a large sum abroad, it is as important for smaller amounts which are transferred on a monthly or quarterly basis.

Although many expats see regular transfers as a complicated and stressful process, currency specialists offer solutions that enable you to make the most of your money without any worry. Indeed, you can decide to set up Direct Debit so the payments for your pension, mortgage payments, etc., are sent automatically and you get to enjoy hassle-free transfers.

According to your requirements, you may decide to choose between a variable or fixed Direct Debit plan. With a variable plan, you will obtain flexibility regarding the dates at which you can transfer (up to five different dates each month) and you will have the ability to change or stop your transfers at any time. Regarding the rates of each transfer, they will simply be the live exchange rate applicable at the date of each transaction, which means that it will fluctuate and you may get a different rate every time.

If you prefer to fix a rate for the coming 6 months to ensure that if markets fluctuate, you will still be able to transfer at the initial chosen rate, you may consider a fixed regular payment plan.  However, you should be aware that this plan generally offers less flexibility around the dates (start and middle of each month) and is binding for a certain period, generally 6 months. Therefore, you won’t be able to change the terms of the contract before the contract period.

In some instances, alternatives to regular payments might be more suitable to your requirements. Ensuring that you find the best solution will not only save you time and hassle, but also money. It is essential that you speak to a currency specialist who will provide you guidance on the range of services available and help to protect you against markets fluctuations. Remember that every little bit that you save each month could quickly add up to a large amount, so don’t hesitate to talk to the specialists.

 

 

A few months after the UK decided to leave the EU, the possibility of a “hard Brexit” has been mentioned a few times. How would it affect currency markets and what should you do if you need to transfer money overseas?

On the night of the UK referendum vote, once it became clear that we were heading towards a Brexit decision, all traders’ eyes focused on Sterling as a proxy for the UK’s future. As an initial reaction to the result, the pound plummeted against major currencies, and during the following weeks and months, the exchange rate fluctuated significantly, reflecting the uncertainty that accompanied this unexpected decision.

A few months later, we’re still seeing up and down swings from Sterling. In October, the French President, François Hollande, in a speech stated that the UK would not be able to retain membership of the EU’s single market without having to accept the free movement of labour. This story was reported around midnight UK time, which is also the time when traders in the US have finished and traders in Asia are just starting their day, and subsequently caused what in jargon is called a flash crash. This was quite extreme and the market has since recovered, but this shows how investors see a ‘Hard Brexit’ as having bad consequences for the UK economy and Sterling. On the other hand, last month the High Court ruled that the government needs to pass an act of parliament before triggering Article 50. This is likely to cause a delay to the eventual triggering of the clause and it also points to a potential for a ‘soft Brexit’. Moreover, we can’t forget economic data out of the UK which could support the pound should the macro economic environment remain stable.

Uncertainty around what will happen in the markets and how Sterling will react is prominent. Whether a ‘Hard Brexit’ takes place or not, it’s essential that you keep up to date with the market news and speak to a currency specialist, to obtain expert guidance. If you are looking at transferring between France and the UK, whether to buy or sell a property, transfer a pension or send money to relatives, Sterling variations could significantly affect you. Currency specialists will offer you valuable insight through this period of high volatility and provide you with regular market news. They also give you the opportunity to set up Rate Alerts, meaning you’re informed when your desired rate has been reached and can decide whether to transfer.

Whilst finding the right time to transfer is key, another major decision rests on the type of transfer to use. By speaking with currency experts and explaining your requirements, you’ll ensure that you’re advised about the services most adapted to your needs. There are a wide range of services which includes spot contracts (immediate transfer) and forward contracts (locking today’s rate for a transfer at a later date). Choosing the right option could save you a significant amount of money.

It’s important that you keep in mind that whether a ‘Hard Brexit’ happens or not, markets will continue fluctuating, impacting major currencies, including of course Sterling and the euro. So, you should always ask for expert guidance when transferring to make the most of your money.

 

With winter settling in and Christmas fast approaching, I’m planning to send some money to family overseas. But I’m worried that I might lose money with all that’s happening with currency values at the moment. How can I make sure I get the best rates and transfer at the right time?

Whether you’re a Christmas shopping lover or are planning a family get-together for the festive season, you’ll most likely spend some extra money during this time of the year…and for those of us living abroad from our friends and family, it’s often the case that we want to send some funds back to our loves-ones for Christmas.

Whatever the cause, any extra expense such as gifts, chalet rental or trips abroad could quickly turn out to be more costly than expected if you were to choose the wrong time or service to transfer your funds to or from abroad.

Indeed, recent upheavals on the global political and economic scenes have strongly impacted the currency markets, incurring some sharp variations between Sterling and other major global currencies. Those wanting to send funds back to the UK from the EU of late will have benefitted greatly from a weakening of the pound versus the euro, but those in a reverse situation will have been far less fortunate.

When looking specifically at transferring extra funds between France and the UK, numerous options are to be considered. For example, if you already make regular transfers between both countries you could potentially benefit from a favourable fixed exchange rate and therefore you might think about increasing the amount you send each month for a certain period to gradually cover any sum you require by a specific date.

Alternatively, one-off transfers might be more suitable to match your needs; currency transfer specialists offer a wide range of services which will give you great flexibility around the time and rate at which you would like to transfer. For instance, a forward contract would enable you to lock-in a chosen exchange rate weeks or even months before you actually need to transfer your funds, ensuring that you obtain the rate you’ve specified and at the time of your choice (at Christmas for instance!).

They key to ensuring that you get the best possible deal when transferring your funds at Christmas, just like any other time of the year, is to speak with a currency specialist. They help you by keeping a constant eye on the market fluctuations, they’ll understand your specific needs and provide you guidance to ensure you make the right transfer decisions to ultimately avoid losing out on your money!

I expect to receive some inheritance from the UK that I would like to transfer to France where I am now living. What can I do to prepare my transfer and avoid losing money if Sterling drops against the euro?

This is an increasingly common question for many expats who have made the move from the UK to France, leaving behind older loved ones. Indeed, the requirement to move money to or from the UK for a wide array of reasons, from property purchase to ongoing pensions transfers, is a question that’s regularly raised by our readers.

Whatever the reason for your international transfer, you always want to ensure you make the most of your money. Currency markets are constantly moving, so being prepared and aware of the various transfer services available could make a big difference to the amount of money that arrives into your destination currency account.

If you are about to receive an inheritance, you may not be aware of all details such as the exact amount or a clear timeline for your transfer. However, this doesn’t mean that you can’t start preparing and considering your options. Currency transfer specialists offer a wide range of services to match all of your requirements; here are just some that could suit your needs;

 

Forward contract

The GBP to EUR exchange rate has fluctuated a lot in recent months. Frustratingly, you may see the rates reach a point where you would like to proceed, but do not have the funds in place to make the transfer. With a forward contract, you can decide to lock the rate and transfer at a later date; this means you could benefit from your chosen rate whenever you receive your inheritance (potentially weeks or months in the future).

 

Rate alert

If you are unsure of the amount you will have to transfer or don’t want to commit to a Forward Contract, keeping an eye on the markets will be key. By setting up a Rate Alert, you tell the currency specialists your desired rate and currency, and they will notify you when the market has reached your chosen rate. At that point, you can choose to proceed if you wish, or simply revise your alert to a newly chosen rate.

Whatever your reason for a currency transfer, ensuring that you choose the right provider, service and time is essential. Speak to a currency specialist for expert guidance on the markets and products best suited to your needs.

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I currently receive my UK pension into a UK bank account and want to transfer that across to France on a regular basis. What’s the best way for me to go about getting that set-up? Will my bank be able to help me?

When retiring to or purchasing a second home in France, most expats will, at some point or another, need to make international money transfers. Aside from the funds for the initial property purchase, one of the main reasons for moving money from the UK to France is the ongoing transfer of a UK pension. Whether you want to send a lump sum annuity from a UK account or simply make regular ongoing transfers from your monthly payments, transferring this money to your French account shouldn’t be complicated, but there are a few pitfalls to watch-out for.

Making ongoing transfers should be as easy to set-up as a one-off transfer; there is no need to spend hours on the phone or online, every month, arranging the transfer of your money from one country to another. Although various financial institutions, such as traditional banks and currency specialists, offer international money transfer services, you should be aware of the differences in the service provided when it comes to regular payments.

Where your traditional bank would charge you excessive fees and often poor exchange rates every time you transfer, currency experts guarantee very low or no fees at all and highly competitive rates. If you are transferring your pension every month, this could represent a significant amount of money saved over time.

When most of the banks make regular overseas transfers a tedious and complicated task, currency specialists can offer regular transfer services which are fast, simple, fee-free and adapted to your needs. They’ll help you set up a Direct Debit to ensure transfers are done automatically and at the best possible exchange rate.

You can even choose to fix the amount (in Sterling) you’re sending from your UK account or the amount (in euro) that arrives on your French bank account. Additionally, some providers will also give you the possibility to fix the exchange rate in advance for your transfers. This means you’re able to transfer for a set-period of time at a pre-selected exchange rate and avoid the fluctuating nature of currency exchange rates.

With the flexibility of the services and the guidance provided by currency experts, you will be able to make the most of your money when transferring your pension. Speak to a specialist today to set up your regular transfers, and start saving on those unnecessary fees and poor exchange rates.

Whether I transfer a small or big amount of money overseas, how can I make sure that my money is safe and will arrive to the recipient account without any issue?

In today’s environment of new and potentially unknown finance brands and an increasing number of online scams, it is sometimes difficult to know which companies to trust and which ones to avoid. When sending money overseas, whatever the amount, you always want to ensure that your funds will reach the recipient’s account 100% securely. Therefore, it is crucial that you undertake some research and understand the difference between various safety levels that different companies offer.

Before you make a transfer with a currency specialist, you should check that the firm is authorised by the Financial Conduct Authority (FCA) in the UK and by the Autorité de Contrôle Prudentiel et de Résolution (ACPR) in France. Being “authorised”, which is compulsory for all firms with over €3 million turnover per month, means that the FCA closely audits the company in question to ensure they have appropriate systems and controls and that all activities are compliant. Smaller firms sometimes choose to be “registered”, which involves a simpler application process but restricts the services they can provide. Also, make sure that the company you use will keep your money separate from the firm’s own account, in a ring-fenced account; this will protect your money even if the company gets into difficulty.

If you are transferring your money online, for additional safety, you could check that the website has a Secure Socket Layer (SSL). The SSL establishes an encrypted connection between your computer and the server (website) which protects sensitive and private data such as credit card numbers. To find out if the website you are using has a SSL, simply check if a padlock appears in the address bar at the top; sometimes the address will show in green too.

Keeping all this in mind, once you’ve chosen your service provider and are ready to trade, online or over the phone, you should always make sure you are aware of all details, including the exchange rate, the possible additional fees, the transfer timeline and the possibility to cancel a transaction. Once you have traded, you should always receive a confirmation by writing or an email.

Post-Brexit fallout – what do the fluctuating currency markets mean to me?

The last few weeks have been very volatile on the currency markets, as illustrated in the chart above, which highlights the falling trend of Sterling versus euro in the aftermath of the June 23rd Referendum. The post-Brexit fall in the value of Sterling was compounded by numerous changes in the UK Government, including not least the Prime Minister.

However, the immediate chaos is beginning to settle. The confirmation of Theresa May as Prime Minister and the Bank of England decision to keep UK interest rates on hold have helped to stabilise the market, for now at least.

Throughout the coming weeks and months, speculation will continue as to when the UK government will begin the formal Brexit process, and what arrangements are likely to be agreed, inevitably leading to more uncertainty and a very sensitive time for Sterling.

Whether you need to transfer money to or from France, in these times of such volatility, you should be aware of the various services available to meet all of your requirements, and which option best suits your needs. These include;

• Limit orders – non-contractible until payment is made, they enable you to target a rate and transfer only when the market reaches it
• Forward contracts – locking in today’s rate with a small deposit and transferring at a later date; a service particularly useful if you need to transfer to the UK, particularly considering the strength of the euro against Sterling at present.
• Digital wallet – using an online platform to buy Sterling with your euros now and store them on your digital wallet until you actually need to transfer your money, again a great option given the current market rates
• Rate Alerts – select your chosen currencies and target rates in advance, whenever the market reaches that level, you are notified and can decide whether to transfer.

Keeping aware of the currency market changes and rate variations will be critical for your international money transfers. Therefore, it is important to ensure you speak to an experienced currency specialist who will watch the market for you and assess your requirements to help you choose the right service and the best time to transfer.

With the increase of VIE/VIA, expat and student exchange programs, will the need of international money transfers become more prominent?

Over the years, various work programs and student experiences have been developed to give everyone the opportunity to expatriate across the world. Starting in 1987, the ERASMUS program dedicated to students looking for an international experience has quickly become successful and now counts more than 3 million participants since its launch. Later on, in March 2000, France has seen the introduction of the VIE and VIA (Volontariat International en Entreprise/en Administration) enabling any person between 18 and 28 years old to be sent abroad by a French company to complete a placement lasting up to 24 months.

Amongst numerous benefits are the easier insertion in a different country and culture, the learning of new languages and the valuable experience gained in another environment. Those experiences have become so important that many universities and private schools (such as business schools) are making it mandatory in order to graduate. Apart from the obvious benefits, some people are also looking at the financial aspects of such opportunities; a VIE or VIA offers paid travel expenses, international health insurance plus the absence of taxes on salaries…. However, it is very important not to forget that the salary will be paid to a French bank account.

Wherever one expatriates, whether it is for a student exchange or for a work opportunity, the question of moving money from one country to the other is always present. From parents who need to send money to their children to pay rent and fully enjoy their stay in a foreign University, to VIE workers who need to transfer their salary to their local bank account, they all require regular overseas transfers.

Choosing a specialist to transfer money overseas rather than a traditional bank could save a significant amount of money in these situations, especially for regular transfers. At Currencies Direct, we can help you moving your money abroad, whether it is a one-off payment or if you need to set up regular money transfers, you can choose to make your transfers over the phone or 24/7 via our online platform. We’ve been around since 1996, have offices across 9 countries, and have helped over 120,000 people save money on their international transfers. Find out how we can help you today.

Currency transfers all seem to be about numbers – is there any hard cash involved in the process?

Asking this question a few decades ago would have led to a very different answer from today. Indeed, paper money and coins have been predominant since they were first launched by the Bank of England in the 17th century, over 1,000 years after the first paper money was used in China. However, the recent decades have seen a wide change in the payment landscape and use of ‘hard cash’.

 

From the introduction of the credit card in the 60’s to the launch of automated electronic payments, the marketplace has quickly evolved to now offer people new alternatives such as contactless technology, mobile wallets and smartphone applications. We can see a change in payment preferences and people’s behaviour, as they feel increasingly comfortable using different payment methods and carry less cash.

 

Retailers and companies are following this trend making it easier and often quicker to pay through alternative methods; more and more stores are now fitted with contactless terminals and mobile app wallet payments are accepted. In some instances, the cash payment option has even been banned in an attempt to save time and reduce effort; an example would be your Bus journey in London where cash is no longer accepted and your only options are contactless and pre-paid travel cards.

We’re all getting used to an increasingly cash-free world, where we pay for everything from our clothes to our daily commute with phones and cards, and international money transfers are no different. These days, unless you’re changing manageable sums of money in person (for example, at a bureau de change) or you’re a movie character leaving the country carrying a suitcase stuffed with money, your currency transfer is more likely to happen online, through an application or over the phone, with absolutely no physical currency involved.

At Currencies Direct, we make overseas money transfers quick, easy and worry-free. Whether you need to make regular payments abroad, a one off transfer to buy a house or send money to friends or family, you can transfer your money through our online platform at any time or over the phone if you wish to obtain some guidance and expert insight.

How could the results of the upcoming French elections impact exchange rates and my international money transfers?

If the past year has taught us anything, it’s that nothing can be taken for granted in the world of politics. The French general elections are about to begin, and there are worries that a win for far-right candidate Marine Le Pen could mean chaos for the country, and the rest of Europe.

Up until recently, the chances of Le Pen’s Front National party winning looked pretty slim, but given the UK Referendum outcome and Donald Trump’s election to the position of US president in 2016, it seems that nothing is now out of the question when it comes to the unpredictable world of politics.

If Ms Le Pen’s party was to take power, currency would be one of the big concerns for not only France, but Europe as a whole, and particularly those nations who adopted the euro as their currency. Political uncertainty and unexpected results can have severe impacts on global currency values, and they often send exchange rates rocketing high, or spiraling lower. Experts have been predicting for some time that a Le Pen win would mark a short-term crash for the euro, with the potential for the currency to drop in value by as much as 10% in the aftermath of the April’s elections.

Concerns also extend to the question of the entire future of the EU. 2016 was marked by the UK decision to leave the European Union and there are fears that other countries could look to go down the same route if certain political forces are successful in upcoming domestic elections.

France was one of the nations highlighted back in June 2016 as being a ‘risk’ in terms of right-leaning parties pushing for their own countries to leave the EU, and it seems that Marine Le Pen has leanings towards this approach, should she come to power after the election.

Such a decision could pose disaster for political union in Europe and also significantly impact the currency markets, particularly the euro.

If you make regular transfers to or from France or are looking at transferring a large sum for a property sale or purchase, it is essential that you speak to a currency specialist to obtain guidance on the markets in the coming weeks. These experts will not only help you choose the transfer services that best suit your current situation, but also select the best time to transfer. With potentially huge fluctuations in the currency markets in the upcoming weeks and months, locking a rate for a future transfer (thanks to forward contracts) or setting up Rate Alerts (to be notified when your desired rate has been reached) could be very useful. Contact your currency transfer specialist today to ensure you make the most of your money on every transfer