Published On: Tue, Feb 21st, 2023

Why exchange rates are crucial when you’re making high-value transactions abroad | Personal Finance | Finance

When you’re making a large purchase in another currency, for example a holiday home abroad, you’re at the mercy of exchange rates – and it could put you at risk of losing thousands of pounds.

The good news is that you can protect your money, and your peace of mind.

Smart Currency specialises in currency for transactions such as property, and regular payments for those retiring abroad or investing overseas.

They have been the trusted voice in high-value international payments for 20 years, and are regulated and authorised by the FCA (you can find out more here). 

They’ve shared some insights into why exchange rates can have such a big impact.

Check out their guide below.

What’s the risk?

While you agree a price in euros or dollars, exchange rate changes will mean the price in pounds sterling changes every minute.

Sometimes the exchange rate changes so far between agreeing a price and actually paying, that people can’t find the extra money and their dream home abroad is lost (maybe taking their deposit money too).

Changes don’t always happen gradually. Between August and September last year, the value of sterling dropped around 7% against the euro and close to 10% against the US dollar.

What’s different about large transactions?

With large transactions, you need more than the usual service you’ll get from an app or your high street bank (if you can find one open). There’s a very good reason to work with a company like Smart Currency where you’re assigned a personal account manager.

As you’ll know from getting holiday cash, exchange rates move. It’s normal for currency pairs to move by as much as 10% over the course of a year. For example, this time last year £100 bought you around €120. Lately, it’s been buying you around €114.

Changes to exchange rates will have an outsized effect on a high-value transaction.

For example, if you had been viewing a property in Spain, France or Florida last summer and agreed to buy a £100k home, a month later exchange rate changes could have left you paying as much as £10k more.

Why do currencies move?

No-one can control where exchange rates go and no-one can even really predict when and how far either.

Normally it is down to economic news and policy, such as a country’s inflation rate.

Over the past few years, Smart Currency has seen rapid and unpredictable movements in exchange rates, due to Covid-19, the war in Ukraine, the energy price rises and inflation. There is no reason why it should stop – these are still turbulent times in the global economy.

How can Smart Currency help?

Being proactive with a high-value trade is important.

Specialists at Smart Currency will ensure that you won’t be on your own guessing where exchange rates are going. They can guide you through potential pitfalls, putting protections in place as soon as you commit to a purchase.

For those retiring abroad or transferring wealth, you can set up a regular payment system, with a fixed exchange rate, so you‘ll know exactly how much you have to spend each month. For example, transferring your private pension of £2,000 each month to Spain at the same exchange rate every month, rather than leaving it to chance.

For those committing to buy a property in a certain timescale, your trader can lock in your exchange rate so you’re unaffected by movements.

It’s all about peace of mind. After all, when you’ve spent a lifetime building your future, why risk your large currency transfers to chance?

Visit to register for free, or call 020 4586 2426 and hear more good news on how a currency expert can help you.

When you register for your free account with us, you will be assigned a personal account manager. They’ll listen to your needs and help plan your currency transfers. You won’t find us hiding behind an app – just give your account manager a call – although you’re very welcome to use online options too.

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