How to send money in unpredictable times

Tips By Sonia Rothwell Mar 28, 2019

People and their needs drive global money transfer and at Western Union we see that more clearly during times of uncertainty. Currency volatility (spikes in the value of a currency) can be caused by lots of things. It could be a political or economic situation, there can be “runs” on currencies which cause values to swing around. The biggest spikes tend to be around political situations or announcements like Brexit, for example.

What makes people decide to send money?

Although the actual trading of currencies is a high-finance business, the impact of currency volatility is felt in our daily lives more than you might think, especially in Western Union’s business of global money transfer. If you think about the reasons that people send money abroad – a regular fixed amount to fund a relative’s education or a less time-sensitive regular amount to build up a pot of savings in another country – how strong or weak those currencies are does make a difference.

Volatility can be a pleasant surprise when it’s in your favour but unfortunately the impact is often more significant when rates drop and you have fixed costs in a second currency which you can’t avoid. It could also mean the person you’re sending to gets less money, unless you can adjust the amount you send to compensate.

We know from our long experience in global money transfer that there are some countries where people are more likely to send only when the exchange rate is favourable. We can see that in the patterns of transfers they make. Exchange rates make a huge difference to this behaviour. Rates can sometimes change by 20% or more, which happened a few years back to the Indian rupee-Sterling rate for example.

3 tips for sending money in uncertain times

How you manage the peaks and troughs in the rates depends on your circumstances and your appetite for financial risk. The travel industry found when Stirling weakened against the Euro, there was an initial fall in sales of the Euro but then it noticed that people were buying more Euros because they were thinking long-term. They weren’t sure if Sterling would strengthen or continue to slide so bought before the rate fell further.

  • If you’re sending small amounts, currency volatility doesn’t tend to have much of an impact, unlike if you were sending larger amounts, so bear that in mind if you don’t have to send larger amounts.
  • If you know what your money needs are likely to be, plan ahead as much as possible.
  • If you’re not in a hurry to send, consider if you’d be better off waiting for better rates.
Beyond Brexit

Western Union operates as usual during times of currency volatility. Over the Brexit period and beyond, and during inevitable future political or economic instability, Western Union will be there for our customers to help people send money for better.

Find out: How to send money with Western Union

Learn more: How to read currency exchange rates