If you’re planning on buying this year, and don’t want to have your purchasing power reduced by potentially thousands due to fluctuations in the currency markets, you may want to consider the impact of the following upcoming events. We’ll also explain how you to protect your money in the midst of this uncertainty.
With the coronavirus pandemic dominating headlines this year, Brexit has slipped off the radar for many. However, we are approaching a critical period, as the transition period ends on the 31st of December. Negotiations, which have been taking place for months, could be coming to their ‘make or break’ moment very soon.
The UK Prime Minister, Boris Johnson, said previously that he would walk away from negotiations on the 15th of October if a deal isn’t agreed by then. Whilst no-one can be sure exactly how negotiations will play out or if Boris will stick to his statement, it’s worth preparing yourself for all eventualities.
The pound has been volatile recently, reacting to both positive and negative Brexit news. So if the Prime Minister walks away from negotiations in the coming days, we could see sterling weaken significantly. Equally, if a deal is reached, then the pound could strengthen.
If you’re looking to buy a ski home overseas, these potential swings in the currency market could affect the value of your budget.
The Presidential Election
The upcoming Presidential election is another event which has the potential to rock the currency markets. Joe Biden is leading in the polls at the moment, but it will probably come down to several key battleground states, as well as how the upcoming debates play out.
Overall, it could be a very tight race. President Trump’s handling of his COVID-19 illness has so far been extremely divisive, so it will be interesting to see if this has gained or lost him support. Meanwhile, Biden will have to address issues surrounding the economy and law and order effectively to retain his lead, as these topics are thought to be swayed in Trump’s favour.
The election takes place on the 3rd of November. However, a record number of voters are expected to use postal votes, which means that the result could take days or possibly weeks to be finalised. Any result, especially if unexpected, is likely to rock the currency markets, which could have an impact on your budget if you’re looking to buy a ski home overseas.
How to protect your money
For many international buyers, the safest option is using a forward contract, which locks in the same exchange rate for up to a year. If you lock in soon, you will have the peace of mind that your money will be unaffected, whatever happens. Find out more in the Property Buyer’s Guide to Currency.
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