Dealing with currency volatility

How to manage your money

Transferring money internationally or looking for the best way to manage multiple currencies? Here’s what to consider in times of economic turbulence.

There are many factors that affect the stability of currencies – from import and export prices to inflation and interest rates – but economic and political uncertainty are high on the list. And, over the course of the past 18 months, we’ve had more than our fair share of both on a global scale.

Consequently, currency volatility – where exchange rates rapidly rise and fall – has been widespread. Speculation about the UK’s future relationship with the EU means it’s likely that there will be a prolonged period of currency uncertainty. So, it’s important to understand currency fluctuations – and how you can manage your money in times of turbulence.

Looking back: Currency fluctuations

The pound

After the EU referendum result in the UK in June 2016, the pound dropped to a 31-year low against the US dollar1.

This year’s snap general election also affected sterling, with an initial fall of 2.5% against the US dollar after the announcement of a hung parliament, which then levelled out to a 1.6% loss2.

The US dollar

The US dollar has seen multiple gains and losses since President Trump was elected. Following Trump’s win, the dollar initially gained against international currencies3 – rising further against the pound as we moved into 20174.

However, sterling is now up against the dollar, compared with its January low5.

The euro

In the face of multiple elections across Europe, the euro has also seen fluctuations in the past year.

After advancing against the pound following Mark Rutte’s victory in the Netherlands6 and the election of Emmanuel Macron in France7, the euro has weakened since Germany’s general election in September8.

Looking forward

More political and economic uncertainty may be on the horizon on UK soil, as well as further afield.

There may be more political and economic uncertainty to come. Brexit negotiations and a potential rise in UK interest rates, the first in a decade, will likely affect the value of sterling.

 

Managing your money during currency volatility

There are plenty if options to help you minimise the impact of currency value – whether you’ve just moved to the UK or are transferring regular sums in a number of currencies.

Looking for the right time to exchange money?

Whether you’re travelling, trading or sending money to family abroad, you need currency exchange rates you can rely on. To keep up to date with mid-market exchange rates (the mid-point between the buy and the sell prices of two currencies) in real-time, download the FX powered by Barclays app9.

The app – which covers over 90 currencies – includes a quick calculator with handy charts to help you check trends from the past day, week, month or year. You can even receive rate alerts for your chosen currency pair when the market reaches a rate specified by you.

Managing multiple currencies?

If you’re making regular international transfers, consider a Foreign Currency or Euro Account.10

A Foreign Currency Account or a Euro Account can help you avoid potential exchange rate losses. There’s also no fee for transferring between your Foreign Currency or Euro Account and your sterling current account with us. Foreign Currency current accounts are available in 23 currencies and Foreign Currency savings accounts are available in US dollars and euro.

Although it’s worth noting that fees may be applied when you receive payments or withdraw or deposit cash, and overseas banks will normally make a charge for delivering payments. These charges will vary, depending on the bank and country.

Transferring money abroad?

If you need to transfer money abroad, we can help you minimise the cost.

With Online Banking and Barclays Mobile Banking, you can now transfer money to many countries around the world and in all major currencies. Barclays will not charge you for this service, however, please be aware that the recipients’ bank may still apply an ‘overseas delivery’ fee.

With Premier, you can send up to £100,000 abroad with Online Banking10, or up to £25,000 in Barclays Mobile Banking11. And you can get up-to-the-minute exchange rates by logging in to either, to give you complete ease and convenience when sending money abroad.

You may also be interested in

How currency movements can affect you

Clare Francis discusses how people have been affected by changes in the value of the pound, before discussing the three key factors influencing currency movements.

Opportunity in volatility

The outcome of the EU referendum is likely to be a period of market uncertainty. Do these uncharted waters pose a threat or an opportunity for investors?

You may also be interested in

International payments

Send money to over 200 countries

It’s quick and easy to send money all over the world with Online Banking. And, now, you can send euros and US dollars in Barclays Mobile Banking.

Sending money is fee-free12 when you make the payment online. Alternatively, visit us in branch with fees starting from £15. 

Foreign Currency Account

Bank in the currency of your choice

Make and receive foreign payments with our Foreign Currency Account.

FX powered by Barclays

Get live exchange rates for over 90 currencies, directly from Barclays.