If one word sums up currency markets at present it’s volatility. The Italian political crisis is shaking confidence in the euro; continuing doubt over the shape of Brexit is impacting sterling; while the US dollar is being influenced by talk of trade wars, not to mention the social media activities of the head of state.
These are just some of the factors which are leading more and more businesses and private individuals to turn to foreign exchange specialist Moneycorp with its compelling proposition of highly competitive exchange rates, lower transfer fees, a market leading online dealing platform, and a superior level of client management and guidance.
Moneycorp is the fastest growing international payments company in Ireland. Headquartered in the UK where it has been providing foreign exchange services for the past 40 years, the company has seen high year on year growth in Ireland since setting up here in 2013. “We are helping corporate and private customers save money on cross-border transfers”, says Derek Hennessy, head of private and partnerships with Moneycorp Ireland.
Unstable exchange rates
“The exchange rate environment is very unstable at the moment”, Hennessy adds. “The political turmoil in Italy is undoubtedly having an impact on the Euro to US dollar exchange rate. This has already been subject to quite dramatic fluctuations in recent years. In 2014 the Euro stood at a high of $1.40 and slumped to a low of $1.03 in January of 2017. It’s averaged $1.20 so far this year however in recent weeks has slumped to a fresh 10 month low of 1.15”
The impact of these rises and falls on Irish businesses can be quite damaging, Hennessy explains. “If you are buying in products or raw materials from Asia the price will be fixed in US dollars and any fall in the value of the euro could drive the price up significantly. On the other hand, if you are selling into the US and the euro rises you will lose out. For food companies and others trading on very thin margins even slight currency variations can wipe out profits very quickly.”
Moneycorp assists companies to meet these challenges through its tailored service which sees a dedicated account manager expertly guide customers through the whole process of making or receiving a foreign currency payment.
“We have the expertise, the technology platforms, and the ability to hedge forward which give companies the tools to mitigate the risks presented by this environment”, Hennessy continues. “Our business is foreign exchange focused only and that means we can offer these services at much more competitive rates than the banks.”
Over 1,000 corporate clients
The firm deals with over 1,000 corporate clients in Ireland alone. “Companies who are exporting or importing products, paying staff based overseas or buying machinery need to manage their currency risk. The best way to hedge against that risk is to buy or sell forward the foreign currency. We can offer rates to our customers to buy or sell up to 24 months out. That way they can lock in their margin or ensure they don’t get any nasty surprises when it comes to paying for a property or other overseas asset.”
The Moneycorp service is also very popular with personal customers, particularly individuals who might be buying or selling a property overseas
The Moneycorp service is also very popular with personal customers, particularly individuals who might be buying or selling a property overseas. “Large numbers of Irish people emigrated during the recession and are now moving back home. They might be selling a property overseas and want to bring the money back to Ireland. On the other hand, Irish people moving abroad might want to buy a property and move money from here to fund the purchase. We also have clients who have overseas earnings and inheritances and need to convert US dollars or other currencies at competitive rates.”
Irish people travelling back and forward from the UK and other locations for work also find Moneycorp’s competitive rates and low fees very attractive. “Quite a few people who are resident in Ireland commute to the UK or even further afield to work during the week”, says Hennessy. “It might not be practical to move abroad permanently due to family or other reasons. This will involve the individuals concerned in a large number of currency transactions and our rates can make a very big difference to them.”
Reduce exposure to risk
Irish people living abroad can also benefit. “We have parents of Irish students paying college fees and rents for their children”, he adds. “Many of our clients are also availing of the €3,000 annual limit under gift and inheritance tax to send money to their children who are living overseas.”
No one can predict the future, but we can make provisions to guard against adverse outcomes, Hennessy concludes. “The world is an uncertain place and no one can really tell where the market will go over the next six months or longer. The outcome of the Brexit talks still hangs in the balance, American trade policy is volatile to say the least, and the political situation in Italy is uncertain to put it mildly. However, by proactively hedging foreign exchange flows, companies can significantly reduce their exposure to these risks as can private individuals. Moneycorp has the tools to help them do that.”
