In time of uncertainty, currencies can be even more volatile. With the entire world ramping up efforts to control the Covid-19 pandemic, the toll on people’s lives is tragic and immeasurable, but there is also huge economic uncertainty, having a profound effect on the markets never seen before, causing currency volatility.
Even after the Bank of England cut its interest rates to 0.1% to protect the economy, its lowest rate in history, sterling fell to its lowest level against the US dollar since 1985. Excluding the overnight flash crash in early October 2016, this was the lowest sterling has been for a generation.
We have seen major movements in the currency markets, with US dollar hitting levels of $1.1409, this had not been seen since 1985, and GBP/EUR dropping down to levels of €1.0511, rates not seen since the global economic crash of 2008.
Guidance during these unprecedented times
It’s been more challenging than ever to guide our clients through these times; not just from a professional standpoint but also on an emotional level. We know that behind every currency transaction is potentially someone’s passion or dream, or they are sending the funds to friends and family overseas, and we’re entrusted with something very important.
We keep our clients up to date with the market as a way to help them feel a little more in control. One tool we are guiding clients to use during these turbulent times is a Market Order, which helps if you have an international payment to make and you don’t want to keep checking the rates for the right time.
If you’re planning to make a major international payment in the near future, you may currently be watching the foreign exchange markets closely. The challenge is that exchange rates are fluctuating all the time, and even with constant monitoring, you may miss out on your desired rate.
A market order allows you target a desired rate and the payment is made if and when that rate is achieved in the market. It can be set up over the phone, and automates the process so that once it is set up, you no longer need to monitor the market yourself. There are no guarantees with this approach because it’s not possible to predict how the market will move and if it will move in your favour, but if you have time to wait then it might be a way to save you some time.
Understanding the limitations of a market order
The main limitation is that there are no guarantees when it comes to exchange rates, so you could be waiting for a rate that is never achieved before your payment deadline. If you’re concerned that the rate may deteriorate further, you can pair your target rate with a minimum rate that you consider acceptable for your budget. This can work in conjunction with a best-case specified rate so that one cancels the other out as soon as one of the rates is achieved.
Speak to a specialist
A market order is just one of the currency tools you can access if you organise your international payments through an FX provider. A currency specialist can talk you through the various tools and provide guidance on which might work best for you depending on your circumstances and your budget.
Whether you want to set up a market order or find out how you can make cost-effective international payments to suit your requirements and budget, a currency specialist may be able to help.
moneycorp is a trading name of TTT Moneycorp Limited which is authorised by the Financial Conduct Authority under the Payment Service Regulations 2017 (reference number 308919) for the provision of payment services