GBP

GBP surged higher against all major currencies on Wednesday as the odds of the UK avoiding a hung Parliament at next week's general election increased.

Having already moved over 1 cent this week, the pound raced to 7 month highs against the USD to 1.3116 and 2 year highs against the EUR to 1.1830. This is despite downbeat data released earlier in the day which showed UK services falling below expectations to read 49.3.

The appreciation in sterling was mainly due to a YouGov poll released on Tuesday, which showed the Labour Party lose further ground on the Conservative Party. Currently, the gap between the two parties stands at 9 points. Such a result in the election would see the Conservatives walk away with a comfortable majority and likely result in further GBP strength. This is due to an assumption by investors that a Conservative majority in Parliament will put to rest months of Brexit uncertainty and allow the PM to pass his withdrawal agreement.

Key Announcements

10:00 – EUR: Retail Sales (YoY) (Oct) Expectation: 2.2% Previous: 3.1%.
10:00 – EUR: GDP (YoY) (Q3) Expectation: 1.2% Previous 1.2%.

GBP

GBP surged higher against all major currencies on Wednesday as the odds of the UK avoiding a hung Parliament at next week's general election increased.

Having already moved over 1 cent this week, the pound raced to 7 month highs against the USD to 1.3116 and 2 year highs against the EUR to 1.1830. This is despite downbeat data released earlier in the day which showed UK services falling below expectations to read 49.3.

The appreciation in sterling was mainly due to a YouGov poll released on Tuesday, which showed the Labour Party lose further ground on the Conservative Party. Currently, the gap between the two parties stands at 9 points. Such a result in the election would see the Conservatives walk away with a comfortable majority and likely result in further GBP strength. This is due to an assumption by investors that a Conservative majority in Parliament will put to rest months of Brexit uncertainty and allow the PM to pass his withdrawal agreement.

Key Announcements

10:00 – EUR: Retail Sales (YoY) (Oct) Expectation: 2.2% Previous: 3.1%.
10:00 – EUR: GDP (YoY) (Q3) Expectation: 1.2% Previous 1.2%.

GBP

The pound strengthened yesterday after recent polls showed an increase in support for the Conservative Party. This goes some way to allaying fears that their lead was receding after polls from last week showed the Labour Party gaining ground. Uncertainty has risen recently as a hung Parliament looked to be a real possibility, but the nervousness around this has relented.

USD

The dollar suffered yesterday after Donald Trump said a trade deal with China may have to wait until after the 2020 presidential election. This surprise statement reversed the recent news surrounding a trade deal, especially as market participants have been waiting for an outcome for some time. US consumer data has been strong recently due to the Christmas period, but investors are concerned that we will not see a dollar rally due to Trump’s focus on China and the increase of tariffs elsewhere.

Key Announcements

09:30 – GBP: Markit Services PMI (Nov); expected to remain at 48.6.
15:00 – USD: ISM Non-Manufacturing PMI (Nov); expected to fall to 54.5 from previous of 54.7.

The Halloween costumes have been packed away for another year and the Guy Fawkes bonfires have well and truly burnt out. It can mean only one thing: Christmas party season is finally upon us. That magical time of year when our focus switches from pouring over spreadsheets to pouring the free wine at the annual office shindig.

Much like drawing up a list of Christmas party dos and don’ts – do agree with everything your boss says, don’t drink all the wine – can keep your reputation intact, doing the same when sending money overseas can keep your business’s finances intact. Here are a few top tips to help you make the most of your international payments.

Don’t

• Default to your bank: banks offer corporate customers an extensive range of services. However, when it comes to exchange rates and managing international payments, conventional banks may not necessarily be the most cost-effective solution for your business.

Do

• Use a currency specialist like RationalFX: as well as receiving completive exchange rates, you will be assigned a personal account manager who can provide market guidance and insight that empowers you to make informed decisions about the timing of your payments.

Don’t

• Forget to check for any hidden costs: don’t choose a payment provider without checking to see how much they charge to make a transfer. Otherwise, you might receive an unwelcome financial surprise when it’s too late.

Do

• Choose a transparent payment provider like RationalFX: we only charge a small transaction fee of £4 (or equivalent for your designated currency) – this is waived when using our Regular Payment service.

Don’t

• Try and predict currency market movements: you can’t be 100% sure how the political and economic events that influence currency markets will turn out. This makes it impossible to precisely predict which direction exchange rates will move, or by how much.
• Hope the currency market moves in your favour: don’t adopt a reactive approach to currency risk management. This lack of foresight will leave the cost of your international payments completely unprotected against exchange rate fluctuations.

Do

• Establish a currency strategy: by working in partnership with your RationalFX account manager you can adopt a proactive approach to your business’s exposure to currency risk. They can help you establish a tailored currency strategy using specialist tools, such as forward contracts and market orders, to help reduce the impact of unpredictable exchange rate fluctuations.
• Secure a rate using a Forward Contract: this allows you to secure the current market rate now for an international payment that happens up to two years in the future. This gives you peace of mind that the cost of your international payments will remain unaffected by exchange rate fluctuations.
• Track a rate using a Market Order (limit order or stop-loss order): this allows you to choose a trigger rate you want to make your international payment at. Once the market reaches your desired level, your payment will be executed at that rate, eliminating the need to constantly monitor the currency markets.

Don’t

• Neglect your regular international payments: whether you’re paying invoices to overseas suppliers, paying payroll in a foreign currency or making another regular international payment, don’t do it manually. You might end up paying more than you need to or even forget to send the funds altogether.
• Use a regular payment plan: if you’re making the same international payments each week, month or quarter, a Regular Payment Plan can provide your business with confidence, efficiency and cost-effectiveness. It automates the payment process to occur in line with your required schedule, either using the current exchange rate or a rate you have secured using a forward contract.

Do create an account with RationalFX to start making your international payments more efficient, cost effective and convenient.

Don't forget that we’re giving one lucky business £/€1000 towards their company Christmas party! All you have to do is make a transaction of £25,000 or more between the 4th – 17th December 2019 for your chance to win.

For more information about our corporate Christmas campaign, click here, or create an account to start making international payments today.

At RationalFX, our commitment to making your international payments more convenient – and cost-effective – has inspired us to explore the impact of Artificial intelligence (AI) on daily life. And why we should take inspiration from its ability to help us take control of our lives when sending money overseas this Christmas.

Artificial Intelligence

There was a time when AI was merely futuristic fantasy that filled the pages of comic books and provided the plot for sci-fi movies. In fact, the term didn’t even exist until 1956, when American computer scientist John McCarthy organised the Dartmouth Research Project. It was at this extended brainstorming session of mathematicians and scientists that the concept of Artificial Intelligence was named and established as a field. The foundations for which had been laid by British computer scientist Alan Turing and his team in the 1940s, when they created the Bombe code-breaking machine – the first example of machine learning.

Fast-forward to the new millennium and technology has caught up with imagination. So much so that AI has become part of everyday life, making even the simplest of tasks more convenient. And the sky’s the limit: AI-powered machines are predicted to be better than us at driving a truck by 2027, writing a best-seller by 2049 and performing surgery by 2053.

Let’s remain in the present for now and explore how AI is helping us to stay in control of our busy day-to-day lives. Perhaps the most widely used example is the Amazon Echo – known simply as Alexa – a voice-controlled virtual assistant that has been designed to turn words into action. Alexa listens to you, before translating your voice into commands – from playing music and turning on the lights, to answering factual questions and ordering Christmas presents from Amazon. You can even ask Alexa to check your bank balance, what you owe on your credit card and your most recent transactions.

International Payments

Unfortunately, Alexa can’t help us stay in control of our international payments – not yet anyway. That’s because there’s more to sending money overseas that just clicking a button or making a voice command. International payments expose your finances to fluctuating exchange rates. This currency market risk has the potential to increase the cost of sending money overseas. And with Christmas fast approaching – that magical time of year when we spend money like it’s going out of fashion – you will want to do everything in your power to keep costs down.

These currency market movements are triggered by a range of political and economic variables that are largely out of our control – from Brexit and general elections to GDP figures and interest rates. For example, the pound’s lost between 15-20% of its value against the euro and US dollar since July 2016 – when the UK voted to leave the EU – as Brexit-fuelled uncertainty cast a cloud over the UK’s political and economic landscape. Currencies are averse to uncertainty at the best of times and the prolonged Brexit process has prolonged the pound’s misery, driving up the cost of sending money overseas.

So, if you need to make international payments – whether it’s simply a financial festive gift for a family member or something more substantial like purchasing a property in the sun – you should focus on what you can control: your exposure to currency market risk.

Currency specialists

Thankfully, you don’t have to leave your hard-earned money at the mercy of exchange rate fluctuations. You can take control of your international payments by using a currency specialist like RationalFX. We can help you mitigate the impact of currency market risk on the cost of sending money overseas – this could mean more of your money reaches your loved ones this Christmas, or it could even prevent the price of your dream property in the sun from disappearing out of reach.

Central to our offering is the personal service you’ll receive from your dedicated account manager – your very own Alexa if you like. They can provide invaluable market guidance and insight that facilitates informed decision-making about the timing of your international payments. They can’t stream music or turn up the heating for you, but they can help you establish a currency strategy that helps to eliminate the need to rely on unreliable market forecasts. After all, you can’t be sure of the outcome of events that influence exchange rates, making it impossible to precisely predict which direction they will move, or by how much.

So, rather than trying to second-guess market movements, it’s prudent to plan for all eventualities. Your account manager can help you use a range of specialist tools to do just that:

• Forward Contract: a forward contract allows you to fix a rate today, based on the current market rate, for an international payment that happens on a specified date up to two years in the future. You can then sit back and relax, safe in the knowledge that the price of your payments is protected from exchange rate fluctuations.
• Market Order: secure an automatic trigger rate using a market order, whether it’s a limit order or a stop-loss order. This guarantees that your payment is executed at that rate the moment the market hits. We will inform you when the market reaches your desired level.
• Rate Alert: provide us with details of the currency pair and rate you would like to achieve, and we will alert you when it becomes available, saving you the hassle of constantly monitoring the market.

Looking to make an international payment? Whatever your reason may be for sending money abroad, we’re giving you the chance to win an Amazon Echo and a £/€100 Gift Card to go with it! To be entered into our prize draw, simply send £10,000 overseas with RationalFX between 4th – 17th December.

For more information about our Christmas campaign, click here, or create an account to start making international payments today.