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The importance of currency - 10 August 2009

One of the biggest potential savings that buyers of property abroad can realise is on transferring their currency from Sterling into the local currency wherever they are purchasing. This is ably shown by the introduction of a new service specifically aimed at overseas property buyers from one of the biggest foreign currency sellers on the High Street. The importance of making good deals from currency transactions is also shown in a cautionary tale from one of the biggest media groups in the UK.

As the property markets worldwide continue to suffer from the global economic downturn, the focus of many people who are still buying is to make sure they get the best deal they possibly can. This is equally important in the price negotiations for the property itself as it is in everything that goes along with buying a property overseas.

One of the biggest foreign currency exchange names on the High Street has now announced a service which is predicted to allow customers to save hundreds of pounds a year on the costs they would have incurred in using traditional means to get their money overseas.

The Post Office Overseas Property Money Transfer service has been launched in the past week, in conjunction with specialist currency provider HiFX plc. The new service aims to allow customers to save money on exchanging their currency either for one-off payments involved in the process of buying an overseas property or in the conducting of regular payments from a UK bank account to one in another country, either to pay a mortgage overseas, pay pensions or salaries or even school fees. The service is equally useful for those returning to the UK and wishing to transfer their funds back to a UK bank account.

The new Post Office service offers competitive exchange rates and 0 per cent commission and no hidden charges, as well as reimbursing the customer for any charges that a foreign receiving bank might charge. Sarah Munro, Post Office head of money transfers, said: “Until now, many users of international bank to bank money transfer services have found it to be an expensive business, with limited options for small transfers…They were also at the mercy of volatile currency markets, making it harder to get the most from their money.

“The Post Office Overseas Property Money Transfer service offers customers the ability to fix at a competitive exchange rate, giving them peace of mind for up to a year, which is a real advantage in current markets.”

It pays to make sure you are getting the best deals on currency exchange as the money markets can be notoriously difficult to predict, even for the experts. This week saw the reporting of losses incurred by traders on behalf of Guardian Media Group (GMG), as reported in the Times. The paper says that traders had lost the company £24 million in the past year in bad currency trades relating to a £200 million investment fund. According to reports, it was the US Dollar’s rapid rise against Sterling which caught the traders unawares and led to the loss.

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