In a survey of 10,000 expats conducted by ExpatForum.com in conjunction with Barclays International, 84% of expats (8,400 respondents) claimed to have lost* between £500-£1,000 as a result of poorly-timed currency exchange transactions. Of the remainder, 7% had spent under £500 (588 respondents) and a worrying 9% (756 respondents) had paid out in excess of £1,000 for costly currency conversions.
In 2010 there were more than 200m people living abroad** – a potential 168m expats paying out as much as £168bn in unnecessary currency exchange losses. For every expat currently working abroad, that adds up to an average loss of £840 per expat, per year.
The survey registered “losses” as any amount paid out during an unfavourable currency exchange transaction. These losses usually affect pensioners living overseas (an unfavourable sterling-euro exchange rate has made life harder for UK expats) and expats buying property abroad (poor exchange rates affect UK expats repaying a foreign currency mortgage and also those transferring savings from sterling to pay for the deposit on an overseas property).
In most cases, currency conversion costs can be reduced. Expats can easily minimise Forex (foreign exchange) losses, simply by monitoring foreign exchange rates to take advantage of favourable conversions. The savviest expats have cottoned on to this, and are trying to dodge unfavourable exchange rates by tracking currency fluctuations using mobile technology.
It doesn’t take much to turn an exchange rate to your advantage, but make a conversion at the wrong time and you might as well be throwing money down the drain. Any good Forex Trader will tell you that currency rates can make or break an expat, and while you don’t have to be a Forex Trader to use Forex tools – you do have to keep one ear to the ground so that you know when the moment is right to make your transaction.
A number of new mobile apps have recently been introduced to help expats monitor currency activity – iAlerts monitors the latest currency exchange rates and also sends users information about current and historical exchange rates. It also lists market predictions, tips and tricks, and FX tutorials. IAlerts is useful because it shows fluctuation trends in currencies – that way you can tell how favourable the rate is and gauge whether it is on an upward or downward trend.
By using tools like these, expats can make an informed decision about currency transfers, insulating themselves against currency losses and helping them to make better financial decisions. The idea behind Forex apps is simple – expats are given everything they need to make the right decision, at the right time.
*Losses relate to payments made for currency exchange fees or through buying currencies at a time when the exchange rate is not favourable. Losses were over a year.