Unrest in the EU, threats of ‘Brexit’ and the looming US election are all playing havoc with exchange rates. But to what extent to these fluctuations affect yacht crew, if at all? We speak to Philippa Maile, head of France at Currencies Direct to find out.
What are the main issues crew face when using so many different currencies?
Changing money from one currency to another can be complicated and stressful. If the market moves against you, you can suddenly find that the wage you’ve worked so hard for is worth a lot less when transferring from the currency you have been paid in to your chosen destination or ‘home’ currency. Small movements in market rates can mean a big hit on the money that ultimately ends up in your account.
Similarly, charges in commission and fees from your bank when moving money from one country to another are a big, and often unrecognised, factor that can leave you out of pocket. Typically banks will charge a set-fee and commission against any transaction involving moving one currency to another denomination, taking a hefty slice out of the final sum that would otherwise have landed into your chosen account.
What are the best ways for crew to combat these issues?
By working with a currency expert you can mitigate these risks and ensure that the maximum amount of any transfer arrives into your destination account. They are dedicated currency experts and have lots of experience helping clients to save on fees and commission when moving their money around the world.
They’ll work with you to understand your transfer requirements and can help with future planning to keep you up to date with the very latest market trends and movements. They can also offer a range of options that allow you to transfer immediately, lock-in transfers for future dates at a set-rate or create a rate-alert, meaning you can transfer as soon as your chosen currency reaches a certain rate.
What are the market predictions for exchange rates in the next six months and how might this affect yacht crew?
It would be a brave person to confidently predict how the markets are likely to fluctuate over the coming months. The upcoming EU referendum taking place in the UK will unquestionably have a significant impact for Sterling versus all other major currencies, whatever the outcome.
The main areas of concern in the debate are focused around trade, investment, jobs, regulation, influence and security. With senior public officials now starting to position themselves in the debate, it seems everyone has an opinion.
At the start of this year the GBP/EUR exchange rate was trading above the 1.36 level and already we have seen nearly a 6 per cent drop in the exchange rate down to 1.28, where it is currently trading. A recent forecast from one of the world’s largest investment banks Goldman Sachs has indicated that should a ‘Brexit’ occur then Sterling could devalue by up to almost 20 per cent.
The reality is that no one knows exactly where the exchange rates will move in the coming months. But by working closely with a currency expert you can at least ensure you are close to the latest market rate movements and be in the best possible position to plan ahead for your transfer requirements.
Look out for issue 78 of The Crew Report for more information on how different currencies and exchange rates can impact crew savings - download now.