Buying American dollars
It's all about the US labour market today. The US workforce added 336K jobs against an expectation of 170K. The Fed will use this to decide what to do going forward; this may lead to interest rates staying elevated for an extended period.
EUR/USD is back to 10-month lows following the news. It is a great time to sell US dollars and to buy Euros.
It's nearly $20,000 cheaper to buy €250,000 now than it was 3 months ago.
What are my options?
Option 1 - Buy your Euros in advance
There is no minimum, and Spartan FX can hold your funds on account free of charge.
Option 2 - Fix the rate with a 10% deposit
Fix the rate for a payment that needs to be made in the future.
Option 3 - Split your transfers
Buying 25-50% of your Euros now means that if the rate moves against you in the future, the average rate at which you will have bought your Euros will be better. This helps to spread your risk.
What to bear in mind
While we have seen a number of incremental interest rate increases, these still take time to take effect. Many of the central banks will now want to see how these have filtered through and how they have affected inflation going forward.
This current data has kept the US Dollar strong, however, if you look at the past 12 months, the Euro recovered then there is a US Dollar surge and we are following similar trends.
At the moment exchange rate movements are very data and sentiment-driven and are sensitive to anything positive or negative that goes against market expectations, causing great volatility.
The central banks still do not know how inflation will be affected, and for some countries, the threat of recession is a real risk. While the US economy is proving to be more resilient than expected, it wasn’t that long ago that we thought the US might enter into a recession in late 2023/early 2024.
If you want any certainty with your currency exchange, feel free to contact our currency partner Spartan FX; they can explain all the options available to you. It's free to talk so is definitely in your best interest to do so.