Why has the pound surged?

Sterling’s sharp rise is a direct response to greater clarity about Brexit, as Boris Johnson’s deal is now expected to be passed in Parliament thanks to his Commons majority.

Prior to the exit polls, the pound was at €1.1819, US$1.3153 and AU$1.9045 at 21:40 on December 12. But by 22:10, when it was clear a Tory majority was expected, the pound surged by more than two cents against the euro, by more than three cents against the US dollar, and almost four cents against the Aussie dollar.

Also see: The 5 biggest forex myths you need to know

Jake Trask, FX Research Director at OFX, said:

“As it turned out, the pollsters and the bookmakers were correct with a Tory majority realised, and the margin of victory was always going to determine sterling’s rise.

“A narrow victory by 10-20 seats would have seen a small rally for GBP/USD through US$1.33 and beyond which had been priced in, to a certain extent, by markets already. But as the majority was much higher than that, it jumped towards the US$1.35 handle, as it means PM Boris Johnson’s Withdrawal Agreement Bill should be signed off ASAP.”

Unless there is ongoing in-fighting within the Conservative ranks, the country should now see a straightforward move onto Brexit’s next stage of negotiating the trade deal with the EU. But, to complete this within a matter of months to meet the transition period deadline – currently the end of December 2020 – is a tall order, and any delay could cause further uncertainty, potentially weighing on the pound again.

What does this mean for your global money transfers?

As it stands, sterling’s rally is good news for Brits sending currency abroad. Anyone moving £100,000 to Australian dollars could have gained AU$5,500 in the space of just 10 minutes, from before to after the exit polls were announced. The equivalent transaction to US dollars could have yielded an additional US$3,400. To capitalise on GBP gains, an OFX Forward Contract allows businesses and individuals to fix future payments at today’s rate.

Get in touch: Reach out today to learn more about OFX can help you understand the latest currency market movements

The pound is likely to remain volatile in the coming weeks as Brexit plans take shape, but fast-moving rates can be advantageous for anyone moving money overseas if you know how to make them work for you. Working with a currency specialist to help navigate the complexity of an uncertain market can help to control your exposure and maximise potential upsides with a variety of products that are available to both individuals and businesses.

To find out how to make the best decisions no matter what happens to the pound in the coming weeks, get in touch with OFX experts 24/7 worldwide on one of our regional contact numbers below, or by email at customer.service@ofx.com.

United Kingdom: Personal +44 207 614 4194; Business +44 207 614 4195

Australia: Personal 1300-300-424; Business 1300-300-524

AustralianTimes.co.uk is a proud partner with OFX on The Currency Zone. To stay on top of global currency events and movements, sign up with OFX to hear from their currency experts with OFX daily or weekly market commentary.

IMPORTANT: The contents of this post do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this post.

The post Pound surges as UK’s Conservatives return to power. What does this mean for your global money transfers? appeared first on Australian Times News.

Get in touch: Reach out today to learn more about OFX can help you understand the latest currency market movements

Myth #1: Forex is a short term strategy

The factors that underpin movements on the foreign exchange market are macroeconomic factors, and most of the time, those factors don’t change that fast. So while the day to day news cycle can cause volatile swings, there are still long term trends that exist in many currency relationships. This means that having a currency strategy that takes these long-term trends into account is important for maintaining a stable cash flow when operating a global business.

Myth #2: Your forecast is the way to win

Predictions and forecasts can cause you to lose sight of what’s really happening in the market due to cognitive bias. Behavioral economics has shown us that when you’re predicting, you’ll most likely end up seeing only what you want to see instead of adapting to what’s happening in real time in the market.

That said, having a forecast or a level in mind is not a bad idea, it’s just that many people become too emotional and don’t stick to their plans. A common saying in trading is to “plan the trade and trade the plan”. In order for your forecast to work, you need to detach from emotions, constantly reassess your strategy and be prepared to walk away if it’s not working.

Myth #3: The forex market is really risky

Many people are under the false impression that the foreign exchange market is actually a riskier option than other markets. The reality is that any market, any investment, and any trade needs to be assessed, and the risks need to be contained in order to achieve the best results. More growth usually means accepting more risk whether you’re trading currencies, stocks, bonds or investing in real estate.

Myth #4: Risk management is expensive

A common misconception is that it’s expensive to implement a currency strategy to mitigate risk, which isn’t necessarily the case at all. Managing foreign exchange exposure is one way to ensure that your business can carry on with a stable cash flow in the event of currency volatility.

OFX offer risk management tools like Forward Exchange Contracts, which allow you to lock in a favorable exchange rate and then transfer at that rate up to 12 months in the future. The benefit of using this tool is that it costs nothing, no deposit and if you need to cancel it, no fee. Similarly, Limit Orders, which let you choose a target rate for the team at OFX to monitor the markets to see if it’s reached and contact you if it does, which costs nothing to book and cancel.

How OFX’s risk management tools compare:

Myth #5: The trend is your friend

There’s a lot to learn about the factors that influence exchange rates. From milk in New Zealand to the travertine trade in Turkey, most professionals make the most money from focusing on specialised pairs and gaining a solid understanding of those key relationships.

Many newcomers to forex look at historical data and long term relative exchange rates to evaluate currencies. Professionals in forex understand that the fundamental relationships, like the commodities that drive the value of the AUD, will generally hold true over the long term. That said, forex is also heavily influenced by what’s going on right now.

Also see: Brexit dictates currency moves as Boris takes control

New governments and trade policies, political and military turmoil, populist sentiment and current economic conditions will always trump historical valuations when it comes to pricing currencies in real time.

Trade wisely with the help of facts, not myths

Overall, using foreign exchange as a component of your overall investment portfolio, or to manage the ebbs and flows of running a global operation, can be a strategic way to diversify your assets, but staying informed is critical. Global money transfer specialists OFX provide comprehensive market news on all the major currency pairs daily and weekly. The quarterly Currency Review also takes a deeper dive into the nuances of what’s impacting major currencies like AUD, USD, GBP and more.

AustralianTimes.co.uk is a proud partner with OFX on The Currency Zone. To stay on top of global currency events and movements, sign up with OFX to hear from their currency experts with OFX daily or weekly market commentary.

IMPORTANT: The contents of this post do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this post.

The post The 5 biggest forex myths you need to know appeared first on Australian Times News.

The ongoing drama, as a result of the Brexit impasse, is playing havoc with the pound’s value and creating significant volatility, which is influenced by the smallest amount of good or bad news.

The pound reached a 23-month low against the euro in August as concerns over a no-deal Brexit escalated. On August 11 it reached €1.06 but has since recovered to €1.12 in September.

Hamish Muress, Senior Currency Strategist at OFX, said: “We all thought there was a General Election on the cards, but that has currently gone out of the window. Although there are some clients who are taking a ‘wait and see’ approach to book transfers, other clients are actually taking advantage of the volatile pound with the right strategy to lock in rates.”

Get in touch: Reach out today to learn more about OFX can help you understand the latest currency market movements

Government loses control of the process

Despite a new deal being approved by the EU and UK Prime Minister Boris Johnson, the main problem has been Johnson’s forceful approach to pushing through Brexit ‘do or die’ on October 31. This prompted Parliament to act and pass a law to try and prevent a no deal Brexit happening.

Johnson’s do or die approach has lost his majority in the House of Commons thanks to a combination of defections to other parties and his sacking of 21 of his own MPs who decided to vote against their party on Brexit, leaving the Government relatively impotent. The minority Government the PM holds makes it very difficult to judge the outcome of any vote on any bill or amendment. This often leaves the pound on tenterhooks.

On the weekend of 19th October the Government lost a key vote that stopped approval for Johnson’s deal till the withdrawal agreement itself is cemented in law. More recently, Boris has partially side stepped this law by sending two letters to the EU, one officially asking for an extension, whilst personally also sending one advocating the opposite.

Even so, all areas of British and Brexit politics are moving at pace, so it is hard to predict exactly where Britain goes next.

Pound volatility continues

The constant upheaval means the pound is fluctuating wildly against other currencies, with the slightest bit of good or bad news prompting significant moves – essentially the position we have been in with sterling for a long time now. It looks unlikely that things will become more settled in the short term.

Also see: Six factors influencing exchange rates and what you can do about it

The strengthening US dollar, one of the key safe-haven currencies, has done little to help the pound with GBP/USD hitting 1.20 on August 10, but again the pound has rallied and is at 1.23 at the time of writing in September. The volatility is unnerving but can be beneficial for businesses who need to move significant amounts of money overseas if they can time it right.

For example, if you’re in the UK and your business needs to buy microchips from Silicon Valley, and you transfer pounds to USD 100,000, the difference between buying USD in August versus a few weeks later could be costly. On August 10 it could have cost £83,333 but at the time of writing in September it could have cost £81,300 – £2,032 less.

Mr Muress said: “The most common question we are asked – and forget about the different scenarios here for a second – is ‘how low can the pound go?’ As things stand, I think we have reached the bottom. We have gone under USD 1.20 when things have looked very uncertain, and that is when it looked like a no-deal Brexit was on the cards.

“If we end up with a no deal Brexit and Boris has broken the law [to make it happen], it could drop further. ”

What happens after a potential General Election is unclear, as there is in-fighting in the Labour Party about their approach to both Brexit and the election, and only the Liberal Democrats are definitive about wanting to stay in Europe. So much so, they have now voted at their party conference to revoke Article 50 on day one if they are swept to power.

What can businesses do to plan for Brexit volatility?

Jake Trask, FX Research Director, is working with global businesses to plan ahead in volatile times.

“With the pound still engulfed by Brexit uncertainty and a no deal Brexit still a very real threat despite the passing of a law to stop this, businesses would be wise to consider mitigating the impact this scenario could have on the value of the pound.

“Those concerned by the damage a no deal Brexit could cause on profit margins should think about forward buying currency now, while sterling has staged a slight recovery.

“Targeting a better rate of exchange via a Limit Order has been a good way to take advantage of recent sterling gains. Or if you import supplies or services from the UK, you may be looking to take advantage of the pound at a weaker moment. Our team of currency experts watch the market 24/7 on your behalf to leverage desired rates of exchange. We automatically buy currency when the rates are beneficial. Our clients count on us to protect their business from uncertainly, more so in this current volatile climate when the timing of a transaction can be critical.”

Talk to OFX to learn more about how we can help you mitigate currency risk with Forward Contracts and Limit Orders.

Britain’s economy on a knife edge

Economically, Britain is still in a difficult position, although the anticipated recession has been staved off for now. GDP grew more than expected in September¹, even though it was still only 0.3% up month-on-month.

Yael Selfin, chief economist at KPMG², said: “Given the time that has passed since the vote was cast, a casual observer would have assumed that by now arrangements between respective governments would have been made, businesses would be prepared and everyone would know what to expect from the future relationship between the UK and the EU.

“The reality is different…[but] a last-minute deal coupled with a two-year transition period could give the UK a respite to find its new place in the world economy. It is rare to live in a period with such bipolar short-term prospects.”

A Brexit deal could boost the pound

What happens to the pound will very much depend on whether a Brexit deal is reached or not, even though a no deal option has all but been taken off the table unless the Government chooses to break the law. KPMG anticipates that a Brexit deal could increase GDP to 1.5% in 2020, tempered by the background of slowing global economic growth.

Even with a deal, the full details of the trading relationship with Europe will take time to resolve, said Ms Selfin, but on news of a deal the pound could appreciate by as much as 10-15%. For businesses trading overseas, the potential strengthening of the pound would be good news if they buy goods and services from outside of the UK.

AustralianTimes.co.uk is a proud partner with OFX on The Currency Zone. To stay on top of global currency events and movements, sign up with OFX to hear from their currency experts with OFX daily or weekly market commentary.

IMPORTANT: The contents of this post do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this post.

¹https://www.theguardian.com/business/2019/sep/09/uk-recession-economic-growth-gdp

²https://assets.kpmg/content/dam/kpmg/uk/pdf/2019/09/britain-at-a-crossroads.pdf

The post Brexit dictates currency moves as Boris takes control appeared first on Australian Times News.

Take note, however, that your ability to invest in real estate throughout the country will be based on several factors, such as the type of property that you’re planning on purchasing, and the type of resident status that you hold. Therefore, planning in advance is necessary so you’ll know what your options really are.

Also see: Make paying for your overseas property easier with OFX

To help you along, here’s a brief outline of some of the top considerations for investing in real estate in Australia, including in Sydney.

• The properties available for purchase in Sydney
• Restrictions on foreign buyers
• Budgeting to buy property in Sydney
• Making payments on your property with OFX

What properties are available for purchase in Sydney?

Can foreigners buy property in Australia? Sure, but there are some restrictions in place with regard to the types of properties that a foreigner can buy.

Depending on the type of real estate that you’d like to invest in, you’ll need to follow certain steps:

Vacant Land and New Dwellings

To invest in vacant land or a new dwelling, start by applying for foreign investment approval from the Foreign Investment Review Board (FIRB).

Whether you’re planning on building a new house or purchasing a new dwelling, you’ll be able to use it for yourself and your family. Or you might decide to rent it out, or you may even choose to resell it.

• If you’re planning on buying a new dwelling, it will likely be approved without any conditions.
• If you’re hoping to buy vacant land for residential development, your application might be approved if you can complete the construction within four years.

Also see: How to buy property abroad

Established dwellings

Purchasing an established dwelling as a foreigner in Australia is a bit trickier:

• If you’re planning on investing in an established dwelling in Australia and you’re a non-resident foreigner, you typically won’t be able to go through with the purchase.
• If you’re a temporary resident and you’re hoping to purchase an established dwelling that you’ll use as a holiday home or a rental property, you likely won’t be allowed to do so.
• If you’re a temporary resident in Australia and you’d like to purchase a home to live in, you can do so. Just apply to buy an established dwelling that will serve as your place of residence. However, you’ll need to sell that home once your stay in Australia is over, unless you become a citizen or permanent resident.
• If you’re a non-resident or temporary resident, and you’re hoping to buy an established dwelling to demolish it and build a new residential home, you can apply for approval to do so. However, you typically need to agree to build a minimum of two homes in place of the one that you’re going to demolish.

Are there any restrictions for foreign property buyers in Sydney?

As mentioned above, foreigners who aim to buy residential properties in Australia, including in Sydney, will likely need to start by applying for what’s known as foreign investment approval from the Foreign Investment Review Board (FIRB).

Also, foreigners will be encouraged to invest in new dwellings, and approval might be based upon whether or not the investment could help boost the housing stock.

Seek approval first

First, apply for approval to buy real estate in Sydney. Do this before you take an interest in any particular property.

To apply for foreign investment approval, you can use the Australian Taxation Office’s foreign investment application form. Keep in mind that you’ll need to pay the necessary fee upon submission.

Exemptions

In some cases, such as the ones listed below, you don’t need to apply for approval before investing in real estate in Sydney:

• If you’re a citizen of New Zealand and you’re the only purchaser
• If you hold a permanent resident visa in Australia and you’re the only purchaser
• If you’re buying real estate as a joint tenant along with your spouse, provided that your spouse is a citizen or permanent resident visa holder of Australia or a citizen of New Zealand
• If you inherited real estate from someone’s will
• If you acquired the real estate through a court order
• If you’re purchasing a new dwelling from a developer that can provide you with a copy of an exemption certificate

Annual vacancy fee

Any foreigner who buys residential real estate in Sydney, or anywhere else in Australia, will be required to pay an annual vacancy fee if the house isn’t rented out or occupied for more than six months out of the year.

How to budget to buy property in Sydney

With the help of professionals, like an accountant, mortgage broker, and conveyancer, you’ll be able to figure out how much house you can afford. However, it’s wise to include an additional 5% to cover additional expenses that will come with investing in real estate in Sydney.

In addition to purchase price, consider other expenses, such as the following, when coming up with your budget for overseas property investments:

• Agents fees
• FIRB fees
• Legal costs
• Stamp duty
• Loan fees
• Property inspection costs
• Property taxes
• Property insurance costs

Use OFX to make payments on your property

Once a property is now yours, it’s time to celebrate. But it’s also time to figure out the best ways to save money whenever you need to make payments on that property, such as your monthly mortgage payment or your tax and insurance payments.

If you’re converting your home currency into Australian dollars, using OFX’s handy currency charts can help take the guesswork out of how much you’ll need to pay. On top of that, you can use OFX to make easy and secure international transfers online.

The best part is that you’ll be able to save money by using OFX because you won’t have to pay the high margins and fees that typically come with bank transfers. All of those savings will add up, making it easier to pay off your property.

With OFX, you can get bank beating rates on global money transfers.

GET STARTED

Sydney real estate awaits!

Foreign buyers of Australian property in Sydney need to follow quite a few rules. But, once you get the hang of things, you’ll quickly realize that it’s not so bad. And all of the planning and effort is certainly worthwhile, as you’ll be making a wise investment that will give you access to the best that Sydney has to offer.

AustralianTimes.co.uk is a proud partner with OFX on The Currency Zone. To stay on top of global currency events and movements, sign up with OFX to hear from their currency experts with OFX daily or weekly market commentary.

IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.

The post Top considerations for buying a property in Sydney appeared first on Australian Times News.

The latest 10% tariffs to be added on another US$112 billion of Chinese goods came in to effect on September 1, with further tariffs on US$160 billion of goods set to be added on December 15 – the latter being delayed to avoid peak retail shopping seasons, and ensure the majority of consumer goods, such as toys, smartphones, clothes and shoes, are in the country before the tariffs come in.

By the time the December tariffs are added, the average rate will have reached 21.4%. With China’s retaliatory tariffs on US goods, there shows little sign of the trade war ending anytime soon, and the consequential fallout from the world’s two biggest economies slugging it out is being keenly felt elsewhere, including Australia.

With OFX, you can get bank beating rates on global money transfers.

GET STARTED

What impact is this having on the US dollar?

With stock markets falling in recent weeks and many signs that the world’s largest economy is facing a possible recession in the not-too-distant future, the US economy is feeling the pressure. A phenomenon known as an ‘inverted yield curve’ where two-year bond rates are higher than those paid on 10-year bonds is a key indicator of recession and was seen in US bond markets numerous times in late August as President Trump ‘ordered’ US companies to avoid trading with China.

Strong US dollar means great terms for those transferring to relatively weaker currencies

There has been a noticeable flight to safety in currency terms, with the traditional safe havens – the Swiss franc, Japanese yen and the US dollar, which is still considered the main safe-haven currency even though most uncertainty is being caused by the country’s own President – all strengthening in recent weeks.

For those looking to move their money from US dollars, a strengthening of the currency means they will get significantly more for their money.

For example, if you’re transferring US$10,000 to Australian dollars;

• The interbank exchange rate of AU$1.4428 at the end of May could have resulted in AU$14,428
• The US dollar strengthening to AU$1.4940 on 26th August 2019 could have resulted in AU$14,940 – an extra AU$512 within a matter of weeks
• The picture is similar against a host of other currencies as the US dollar continues its march higher versus other units such as sterling, euro and New Zealand dollar.

What impact is this having on the Australian dollar?

If you are in Australia, there is enormous pressure on the Australian dollar at present thanks to the devaluation of China’s yuan. The country devalued the yuan to less than Yuan7 to the US dollar, which prompted President Trump to further label the country a currency manipulator, which causes further problems for Australia. The move is a clever one for China, since it effectively reduces the impact of any tariffs on Chinese goods being imported to the US as they will be cheaper because of the relative weakness of the yuan to the US dollar.

Also see: Six factors influencing exchange rates and what you can do about it

However, it is bad news for the Australian dollar and the New Zealand dollar, because when the yuan weakens, these two currencies tend to follow suit. So much so that the Australian dollar is being quoted as collateral damage in the trade war.

Australian exports to China become more expensive

Australia’s exports to China, particularly of iron ore and coal, hit the second highest level on record in June this year. The concern is that a devalued yuan means exports to its one of its biggest trading partners are now more expensive, threatening the Australian economy.

The Australian dollar is at a crossroads

While the two global economic superpowers slug it out, there is a very real fallout for other countries exposed to either of these key economies. In Australia, the key ASX200 fell for five consecutive days at the beginning of August, to levels not seen since June this year; a direct result of its awkward position as a key trading partner of China, but a strategic ally of the US. However, the market has been saved somewhat by it reaching a high not seen since 2008 just prior, meaning the fall was a correction more than a rout.

As a result, the Australian dollar is being squeezed in two directions which could prove costly for customers moving Australian dollars to US dollars, whether for business or personal transactions. The expectation is that the Reserve Bank of Australia will also make a 0.25 of a percentage point cut in September, and this has already been priced into currency markets.

Also see: Four things to look for in an international money transfer provider as an alternative to the banks

At the time of writing, the Australian dollar was staying stubbornly below the US$0.68 level, and while the volatility in world economies and world currencies continues, we are unlikely to see any significant progress in the strength of the Australian dollar.

What should Australian customers do?

For Australian customers or businesses who need to move US dollars overseas, now could be the time to talk to a currency specialist to discuss how you can protect your transaction, perhaps by fixing your exchange rate for up to a year to protect you from future fluctuations, or setting a target rate, so your transaction occurs automatically for you when rates hit that level.

Our specialists can also give you guidance on where the Australian or US dollar may be heading, so you have the most up-to-date information when you are making decisions about your transactions.

If you need to move money overseas and want to know how to make the most of your currency transactions, speak to the OFX team. With global offices, there is someone you can talk to 24/7.

AustralianTimes.co.uk is a proud partner with OFX on The Currency Zone. To stay on top of global currency events and movements, sign up with OFX to hear from their currency experts with OFX daily or weekly market commentary.

IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.

The post Why is the Aussie dollar experiencing a fallout from the trade war between the US and China? appeared first on Australian Times News.

But what influences movements in exchange rates? And more, what makes them ‘volatile’? That word gets thrown around a lot in the foreign exchange space, but what does it mean?

Exchange rate volatility refers to the tendency for foreign currency to appreciate or depreciate in value and ultimately affects the profitability of a trade (or transfer) overseas.

Now that we understand what volatility is, what common factors influence it? Let’s break it down below:

1. Inflation rates

Inflation rates impact a country’s currency value. A low inflation rate typically exhibits a rising currency value, as its purchasing power increases relative to other currencies. Conversely, those with higher inflation typically see depreciation in their currencies compared to that of their trading partners, and it’s also typically accompanied by higher interest rates.

Government debt also plays a part in inflation rates. A country with government debt (public or national debt owned by the central government) is less likely to acquire foreign capital, leading to inflation.

2. Interest rates

Exchange rates, interest rates and inflation rates are all interconnected. An increase in interest rates cause a country’s currency to appreciate, as lenders are provided with higher rates and thereby attracting more foreign capital. This can cause a rise in the value of a currency and therefore the exchange rate. Cutting interest rates, on the other hand, can lead to a depreciation of the currency.

*The image above is provided for general information purposes only and is not an accurate representation of the live exchange rate.

3. Monetary policy and economic performance

If a country has a history of strong economic performance and sound monetary policy, investors are more inclined to seek out those countries. This inevitably increases the demand and value of the country’s currency.

Also see: Four things to look for in an international money transfer provider as an alternative to the banks

With the state of the global economy at the time of writing, it’s evident that we’re in a global slowdown and fears of recession are looming. A recession may also cause a depreciation in the exchange rate because interest rates usually fall, however, this isn’t always the case.

Other recession factors that can influence currency value include the determent of foreign investment, which would decrease the value. However, if a recession causes inflation to fall, this helps a country become more globally competitive and demand for the currency becomes greater.

4. Tourism

Let’s use the US as an example here. If someone travels outside the US to another country, they will get more from a money transfer to that country when the USD appreciates against the foreign currency. Similarly, depreciation of a currency means that foreigners will be more inclined to visit that country and spend more while there.

Another factor here are ‘visitor-weighted exchange rates’, which measure a destination’s currency market with those of its primary visitor market. In essence, countries that have a diversified range of visitor markets tend to be more resilient against specific exchange rate margins, compared to those who rely on specific visitor markets.

5. Geopolitical stability

The political state of a country, coupled with economic performance, can also affect the strength of the currency. A country with less risk for political turmoil will be more attractive to foreign investors, leading to an appreciation of the value of its domestic currency from foreign capital.

‘Geopolitical risk’ is the risk posed to foreign investors by unexpected political developments. If a country’s economy and political landscape remains predictable, investors are more likely to buy the currency. The opposite effect is also true, unexpected events lead investors to pull their money back, sending the currency down in value.

The impact of Hong Kong’s Extradition Bill is an example of this in recent times. The bill, also known as the ‘fugitives bill’, would enabled almost anyone who enters Hong Kong – whether in transit, to visit or as a resident – to be extradited to China or any other jurisdiction that Hong Kong does not have an extradition treaty with. The fear is that even multinational executives could be held and removed to a foreign country, whether the charges are unfounded or not.

Despite the protests following prompting the bill to be suspended, the fact that it has not been thrown out altogether creates ongoing uncertainty for businesses and investors in the region, which could potentially see an impact on the Hong Kong dollar.

6. Import and export value

A country’s balance of payments (BOP) summarises all international trade and financial transactions made by individuals, companies and government bodies complete with those bodies of that country. These transactions can consist of imports and exports of goods, services and capital.

The reason BOP is included here is that it influences the ratio comparing export prices to import prices. If the price of a country’s exports are greater than their imports, its ‘terms of trade’ have improved. This creates a greater demand for that country’s exports, and in-turn, greater demand for the currency.

Like many of the other factors influencing exchange rates, the converse reaction can also occur. If the exports rise by a smaller rate than the imports, the value of that country’s exports and currency decrease in value.

What can you do to make volatility work for you?

Now that we know what influences the markets, you’re already far more prepared than the majority. From here, you can use these factors to your advantage when planning a currency strategy that uses any potential volatility to your advantage.

For example, by partnering with a global money transfer specialist, such as OFX, when dealing in different currencies around the world, you can take advantage of tools designed for that specific purpose.

Forward Exchange Contracts for example, allow you to lock in an exchange rate if it suits your transfer needs and then transfer the funds at a later date, even up to 12 months in the future. For example, if you needed to transfer money from USD to GBP and the GBP drops drastically, like it did when the Brexit referendum outcome was announced, a Forward Exchange Contract may help.

OFX also offer other tools that can help you manage your global money transfer needs. See how they compare below:

So while volatility may sound like a bad thing, it doesn’t have to spell the end of a businesses international expansion. With the right help and tools, you can develop a currency strategy that takes into account how volatility can be favourable, rather than feared, providing you with the confidence to dive headfirst into the next market.

With OFX, you can get bank beating rates on global money transfers.

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AustralianTimes.co.uk is a proud partner with OFX on The Currency Zone

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1. Global reach, local feel

When it comes to getting the best rate at OFX, we have 16 partner banks (which means over 150 bank accounts in locations around the world, across 55 currencies). We call this system Global By Local (GBL), and this means that we are able to send funds directly between these banks accounts, rather than using an expensive network of external banks.

2. Understand that risk management and global expansion go hand-in-hand

As a company that has been established for over 20 years, OFX are always looking to new means of ensuring our customers get the best deal. Say for example that an online seller wants to keep cash flows predictable, the ability to lock in an ideal rate for future payables and receivables (like paying overseas staff and suppliers and bringing profit back home) using OFX’s Forward Contract means that you can protect against market uncertainty in the wake of world events (think Brexit).

A Forward Contract allows a customer to lock in an ideal rate and then transfer that amount at any point for up to 12 months.

Similarly, OFX’s Limit Order option means that you can set a target rate, and if it’s reached, a dedicated dealer or someone in the customer support team will contact you via email or phone to complete the transfer. You can then choose to have the transfer processed automatically, or at a later date, even potentially rolling it into a Forward Contract.

3. Find tools for ecommerce success

Risk management tools are great for business customers more generally, but what tools exist specifically for online sellers? As an emerging market, there are few players who understand the unique challenges faced by online sellers. That’s why OFX created the OFX Global Currency Account, which essentially gives online sellers the equivalent of a local bank account in the US, Canada, UK, Europe, Australia and Hong Kong.

David Nichols, Director of Enterprise Development and e-commerce at OFX explained in a webinar with Seller’s Choice that this enables clients to collect their overseas revenue in the currency they’re selling in internationally, and the ability to move that back to their home currency at a much better exchange rate than they would with a marketplace or a bank.

Alternatively, clients can use the funds they’ve accumulated internationally to pay their taxes or suppliers, which essentially removes the requirement of moving money around the world unnecessarily.

4. The trust factor

The nature of dealing with people’s money means that trust really must underpin every aspect of financial services, be that banking or foreign exchange. So it makes sense why people revert to their banks for managing currency flow. However, the financial services industry is a heavily regulated one, which means that the players in that market need to abide by a strict set of rules.

At OFX, our parent company is publicly listed on the Australian Stock Exchange (ASX) and is regulated by over 50 regulators globally. Along with this, the skilled fraud and compliance teams work with many partners globally to ensure our clients’ money is in safe hands.

While the growing market of foreign exchange is seeing many players rapidly appear then disappear, it doesn’t mean that the bank is the only way to go. In fact, a valuable foreign exchange specialist can often have a better understanding of the needs and challenges of businesses of all sizes.

This means that choosing a reliable provider can be key to building a successful international business. At OFX, we strive to be the stable voice of understanding and support for our increasingly global world. We understand that your world never stops moving, so neither will we.

With OFX, you can get bank beating rates on global money transfers.

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The post Four things to look for in an international money transfer provider as an alternative to the banks appeared first on Australian Times News.

What is happening with Brexit?

As the Brexit saga carries on in the UK, drawing out an almost three-year decision-making process, parliament seems all but but paralysed in terms of reaching a decision. 

This has lead to the EU granting the UK an extension until the 31 October, 2019 in which UK Prime Minister Theresa May must come to a decision with the British parliament to avoid crashing out of the EU without a deal.

How does this impact businesses today?

The impact of this uncertainty cannot be understated, further delays mean that households and businesses remain hostage to the crippling economic uncertainty that has already been plaguing the UK since the referendum in 2016.

In terms of currency movements, on June 22, 2016 – the day before the EU referendum – the pound was trading at £1.30 against the euro. By July 8 that year, it was down at £1.16, and has been bouncing around at that rate ever since. Every new headline shows how volatile the pound is in response to any Brexit movements.

Also see: OFX: Where the world’s moving for international money transfers

Similar, the pound fell nearly 20 cents against the US dollar to just under £1.29 after a comfortable period at £1.47 during June 2016. Overall, while the impact of Brexit negotiations is having less of an impact in other areas of the economy, the pound has still lost about 10% of its value since the day before the UK voted to leave.

Along with the lack of certainty at the moment, the impact these fluctuations have on prices impacts importing and exporting is also evident. Suppliers in the EU are more expensive to trade with, yet the cheaper pound makes exports more attractive to overseas buyers. This means businesses working with EU partners will need to be more creative in their approach moving forward.

How can businesses prepare in this age of uncertainty?

There are several ways to stay ahead in the meantime. One way is to work with a currency strategist who can offer tools in risk management. The currency specialists at OFX can offer tools like Forward Exchange Contracts, which allow you to lock in a favourable exchange rate and trade it at a later date. You can also use tools like the OFX Daily or Weekly Market Commentary or Rate Alerts to stay ahead of the game when it comes to currency movements.

Another method is look outside the EU to other locations where you can get your suppliers and/or customers. While the uncertainty of Brexit and its impact cannot be understated, it does allow for businesses to look outside their typical supply chain, which might not have been done otherwise. This provides the opportunity to broaden horizons and potentially increase profits.

AustralianTimes.co.uk partners with OFX for Currency Zone

Join OFX today (click here to get started)

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Don’t let bank fees eat you out of house and home

Preferential rates will help you save money and you’ll enjoy zero OFX fees when you make a transfer.

Also see: How to buy property abroad

Protect your future against fluctuating exchange rates

We’ll help you understand and manage the volatility of currency markets. Our team of experts can walk you through products such as Forwards Contracts that allow you to book in currency at today’s rates for delivery in the future. You can plan and budget with confidence even if rates change between purchasing the property and completion.

Unparalleled 24/7 customer service

Our dedicated dealers can help you create a custom currency strategy that suits your unique needs. We operate 24/7 in 6 locations across the globe including London, Sydney, and San Francisco, so you can book a transfer when it’s convenient for you.

Your money is safe and sound

We have an extensive, highly regulated global network of bank accounts that allows for swift and safe transfers. The OFX website is secured by a global leader in next generation cyber security, Symantec, to offer you peace of mind.

Register now to get started

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International mortgages

When purchasing property in another country, it could be difficult to find the appropriate financing option, especially since some countries might not have any financing options for foreign buyers at all. In some countries, banks cannot take a foreign asset as a security for the loan, so you may not be able to get a standard mortgage from your domestic bank the way you would for a local purchase.

Still other international regulations may prohibit banks from even initiating a conversation to a client about a mortgage if the client is based overseas, even if you’re a citizen of the country in which you want to buy. So how can you get a mortgage for an overseas property purchase?

While traditional bank financing might not be available for overseas assets like it is in your home country, developer financing may be available.

Other payment methods might include using the funds in your retirement account or pulling equity from your primary residence in your home country. You may qualify for business or personal loans that you can use to pay for your down payment overseas. Certain banks, like HSBC, offer mortgages for international borrowers, if you can maintain a minimum bank balance at a designated threshold.

Read this breakdown of international banking policies for Australia, UK, and the USA here.

The impact of currency fluctuations on the real estate market

As you do your research into where to buy property abroad, one of the primary factors affecting the viability of your investment will be the exchange rate. Aside from doing a quick currency conversion, you may want to review the current economic standing of a foreign currency against historical rate charts.

Keep in mind that currencies will fluctuate, sometimes quite dramatically, over time. And sometimes currency exchange rates will change rapidly over a short period of time. This could make the difference between a bargain and being outpriced from a market, so you need to ensure you plan and protect yourself from market fluctuations.

As an example, after the UK’s shock Brexit vote the pound’s value fell sharply against the USD in just one day.  In The Telegraph, Rhiannon Bury reported that in the three months following, 78% of commercial property sales were paid for by foreign investors swooping in on a bargain.

When you’re ready to transfer funds overseas to purchase a foreign property, why not work with the team at OFX to develop a sustainable currency budget. With 20 years’ experience, and 24/7 customer support, their global currency experts provide market insight and guidance so you can plan ahead with confidence, even when currency markets are unpredictable. OFX will be with you every step of the way to ensure your transactions are seamless.

Register today to get started

TOP IMAGE: Image by Nattanan Kanchanaprat from Pixabay

The post How to buy property abroad appeared first on Australian Times News.

What’s happened?

Citing a convention dating back to 1604, Speaker of the House of Commons John Bercow ruled out another vote following two rejections of the same deal. At the time, GBP/USD dipped below 1.32 in response to the votes carried out 12-13 March.

The week commencing 25 March has set up for a number of movements on the Brexit front.  Tuesday 26 March was considered as a possible day for the third meaningful vote (initially planned for 13 March). This was subject to Bercow conceding that May’s deal is sufficiently different enough to allow a third vote.

On Wednesday 27 March, Parliament were given eight options as an alternative to Brexit, which included leaving the EU without a deal, a second referendum and cancelling Brexit altogether. Any option that gained the support of more than half of MP’s would be debated the following week as an alternative to May’s deal.

What to look out for next

None of the eight alternative options provided on Wednesday gained MP majority, which means MP’s will now narrow down the list of options and continue to hold more votes Monday 1 April. 

Indicative votes are not legally binding however, so we don’t know how the EU will respond to any vote that gains majority. Britain now has until April 12 to make a decision or end up leaving the EU without a deal altogether.

Also see: How to buy property abroad

If the third meaningful vote has not taken place by Thursday 28 March, this was another possible date to vote, however, Bercow has since poured cold water on May’s attempts saying the deal needed to be significantly different.

The expected leave date for the UK (and that which is currently written into law) is Friday 29 March. Although May has said that she will pass legislation to remove that legal binding in the meantime.

Take control of your finances

As the pound responds in turn with recent developments on the Brexit front, it’s likely that volatility will ensue into the foreseeable future. 

In OFX’s recent Currency Corner video, currency expert Hamish Muress explains that if a long extension is granted from the EU (which is one of the alternative options to May’s deal), investors and businesses are given two years to plan and prepare. A long extension could also see the GBP rise to 1.35 against USD, which has many taking advantage of OFX’sLimit Order option.

If you’re not sure of what rate you want exactly, you can also take advantage of favourable movements using aForward Exchange Contract. This means you can lock in a rate and transfer at any point up to 12 months. 

OFX also offers tools in understanding market movements throughDaily and Weekly Commentary, and rate monitoring tools like Rate Alerts, so you’ll be notified of favourable movements without committing to a transfer right away.

Register with OFX today to get started

The post What’s next for Brexit and what does it mean for your finances? appeared first on Australian Times News.

1. Start forging new relationships.
2. Get a mobile phone.
3. Decide on your primary means of transport: bus, bike, car, etc.
4. Find a place to live and sign rental agreements, if you haven’t already.
5. Compare and sign up for health, vehicle and home insurance.
6. Open a bank account
7. Explore. Explore. Explore.

Your ability to build a reliable personal network abroad will make or break your experience overseas, so we recommend investing in new relationships from day one.

You can join some of the local clubs that you find, as well as connecting with fellow expats.

If you don’t have a job already lined up, getting one will give you an instant community. Tapping into any alumni communities abroad can be useful for further developing your professional network abroad.

Also see: 10 things you should absolutely do BEFORE you move abroad

Using online services like MeetUp.com to find events in your new locale with like-minded people is another great way to meet people in a foreign country.

If you have children, look for parenting groups in your area to gain further recommendations for settling in.

In addition to making friends abroad, determine what you need to do to access local health insurance and car insurance, as requirements will vary from one country to another.

Just keep in mind that you can’t predict most of how your time overseas will unfold. Be willing to adjust and remain adaptable to reap the greatest rewards.

How Can You Find a Job Abroad?

To find a job abroad:

• Use your networks, including your work contacts, your social media networks and affiliation groups, alumni groups, and your friends and family. You never know who might have the right connection to help you find work overseas.
• Apply to jobs abroad online, as there are many international job boards that you can find with a simple search. You can also attend job fairs once you move abroad to meet local employers.
• Employ the help of hiring agencies and recruiters who can check your resume and match your skill set with the appropriate temporary or permanent jobs.
• Consider volunteering or interning as a means to meet employers, make a solid impression, and potentially get hired to fill a full-time, paid position.
• Work as a freelancer in order to start making money while also making valuable connections in your new locale. There are a variety of global freelancing platforms that connect talent with jobs based all over the world.

How Can You Save Money When You Move Abroad?

1. Use OFX instead of your bank to get better exchange rates on all your international bank-to-bank transfers saving up to 75% on exchange rate margins.*
2. Assess any employment contracts in light of costs of living and additional expenses incurred when moving overseas.
3. Read expat forums to get insider tips for how to save in your particular locale.
4. Use group buying sites like Groupon and LivingSocial to get introductory offers to key attractions and nearby restaurants.
5. Investigate study abroad scholarships, if you plan to study overseas.
6. Consider hiring a tax professional who can help ensure you take advantage of all double-taxation treaties.
7. Review how your move will affect any retirement contributions both back home and abroad.

Once you arrive overseas, you’ll likely want to get a new bank account, but we also  recommended that you keep your old bank account open. It may help you maintain credit-worthiness for when you return home.

Once you have a local account ready, you can then use OFX to transfer your funds swiftly and securely from your old account to your new one at a great exchange rate. You can even use OFX to transfer your pension if you are retiring abroad. And you can use OFX to transfer money for everything from paying your rent or mortgage, to paying everyday bills until you have found steady employment abroad.

Start Your New Life Abroad

Making a fresh start in a new country comes with a fair bit of admin, but the advantages of living overseas are too numerous to count. At OFX, we’re inspired by the risk-takers and adventurers who seek out new experience. Check out our other guides to managing your finances abroad or dive into blog for further reading on all things expat.

AustralianTimes.co.uk proudly partners with OFX on Currency Zone.

The post What should you do when you arrive as an expat in your new country? appeared first on Australian Times News.

*Please be advised that while every effort is made to keep this information up to date, OFX nor AustralianTimes.co.uk do not provide tax (financial) advice. Consult a tax professional about your unique circumstances.

*AustralianTimes.co.uk proudly partners with OFX on the Currency Zone

Do Expats Have to Pay Taxes?

The simple answer: yes. Expats may be required to pay income tax in any geography where they had residency and were earning during the tax year. If you are a U.S. citizen, you are usually required to file income taxes in the U.S. every year, and may be required to pay income tax if your income is above the Foreign Earned Income exclusion. Most other countries do not require citizens who reside abroad to pay income tax on money earned overseas, but you may need to pay taxes like capital gains tax or inheritance tax on the sale of assets in the jurisdiction where the assets are held.

What is a Foreign Tax Credit

Some countries, including the United States, the U.K. and Australia, have foreign tax treaties in place. These treaties usually offer foreign tax credits when you are able to prove that you’ve paid tax elsewhere. These credits help to prevent double taxation, and they may apply to income taxes (including pension payments), inheritance taxes, gift tax and/or and some interest payments. Speak to a qualified tax professional about your unique situation.

In order to be eligible for a foreign tax credit or offset:

• You must have a tax imposed on you.
• You must have paid that tax in a foreign country.
• The tax must be a legal and actual liability.
• The tax is on income, in lieu of income tax, or must otherwise be included in assessable income.

Limits to filing For Foreign Tax Credits in Australia

In Australia, as of 2017, you have four years to file regarding a foreign tax payment.¹ If you paid a foreign tax on income that has already been filed in Australia, you can submit an amended assessment within the four year time period.

Limits to Filing For Foreign tax Credits in the United States

In the United States, you can choose a credit or a deduction for a qualifying foreign tax within the year of accrual. It is an annual choice for foreign taxes paid or accrued during the year, so the decision must be made with every annual filing. You may be able to amend a return up to three years after filing.²

Limits to Filing For Foreign Tax Credits in the U.K.

If you are a U.K. resident, you do not need to fill in a tax return on foreign income if your total dividends are under £300.³ The rules may be different when your domicile is abroad. If you have already paid a foreign tax and are trying to recoup that fee under a double-taxation agreement, it is important to know you may not recover the full amount of foreign taxes paid. There are two factors for this:

What is a Foreign Tax Treaty?

A foreign tax treaty is an agreement between two countries to prevent double taxation. Residents may have access to tax credits, deductions, exemptions or reductions based on taxes paid to a foreign government. Benefits of a foreign tax treaty are dependent on a taxpayer paying taxes in a foreign country then submitting documentation of those tax payment when filing elsewhere.

It is important to look at specific agreements when it comes to a foreign tax treaty. The United States Internal Revenue Service, for example, has tables for withholding rates, compensation, and benefits under foreign tax treaties.⁶ The U.K. provides detailed worksheets for filers claiming foreign tax payments and calculating returns.⁷ The Australian Taxation Office also provides a worksheet that can be downloaded and completed to determine tax offsets.⁸

What Types of Benefits are Part of Foreign Tax Treaties?

Benefits under foreign tax treaties vary by country, but you may have benefits waiting for you if you meet certain criteria. Here are a few categories that may have special tax treaty credits:

• If you are a professor or teacher doing research in a foreign treaty country
• If you are a student, trainee or apprentice and receive funds for study, research, business, professional or technical training
• If you receive some grants, allowances or awards associated with a non-profit organization
• If you have a non-government pension or annuities
• If you have investment income like interest or dividends
• If you have received capital gains other than sales of real property

Consult a tax professional to help you reduce your international tax burden.^9,10

What Records Do I Need to Keep to Claim a Foreign Tax Benefit or Offset?

You will need written evidence that you have paid a foreign tax. This documentation should be retained for at least five years after all filings have taken place. In the United States and the U.K., this information is provided at the time of filing and specific forms must be completed when tax documents are remitted. In Australia, the Taxation Office advises that you keep evidence of foreign income tax offset, so it can be provided upon request. If they require information that is held overseas, they will provide time for it to be acquired and remitted.¹¹

The written evidence should include the following information:

• Amount of foreign income or gains in the foreign currency
• The foreign tax year (may be different than home country tax year)
• The nature and amount of the foreign tax levied
• The date of payment of the foreign tax
• Any balance due on the tax

Which Foreign Taxes Do Not Qualify for a Credit?

In the United States there are some taxes that you pay to a foreign government that do not qualify for a foreign tax credit. These include, but are not limited to:

• Taxes which qualify for an itemised deduction
• Taxes on foreign mineral income
• A portion of taxes on combined oil and gas income
•  Social security taxes paid or accrued to a foreign country where there is a social security agreement in place¹²

What Limits and Exemptions Exist for Foreign Tax Credits in the United States?

Your foreign tax credit cannot be more than your U.S. tax liability multiplied by a specifically determined fraction. That fraction is as follows: Your taxable income from sources outside the United States over your total taxable income from the U.S. and foreign sources combined.¹³

However, there are a few exemptions to this foreign tax credit limit.

• If your foreign source of income is passive income, you may not be subject to the limit.
• If your foreign taxes are not more than $300 single, $600 joint filing (as of 2017).
• If you otherwise report all of your gross foreign income and taxes on a payee statement.
•  If you determine to exempt yourself from the foreign tax credit limit for the year.¹⁴  

Which exchange rate should be used to pay foreign taxes?

Australian Exchange Rate for Tax Purposes

If you are in Australia and need to convert foreign income for tax purposes you have two options for this calculation:

First, you can use an exchange rate from a specific time period as determined by Australian tax law. A table of specific times is available on the Australian Taxation Office website for ordinary income, expenses, obligations, liabilities, receipts, payments, and other values that apply to revenue accounts, capital accounts or otherwise.

Second, you can use the average exchange rate. This means you can use average, daily or rates consistent with those used in an audited financial report. The goal of using average exchange rates is to find a rate that would be considered a “reasonable approximation” of an exchange rate if you had used spot rates.

An example of using average exchange rate is such: Say you are receiving a foreign pension. Instead of calculating the exchange rate at each and every payment, the average exchange rate can be applied to the entire yearly amount.

If you receive funds in the currency of your home country, then the amount total can be used without applying an average exchange rate.

US Dollar Exchange Rate for Tax Purposes

All items on a U.S. tax return must be reported in U.S. dollars. In general, the Internal Revenue Service advises that payer use a spot rate, or the prevailing rate when an item is received, paid or accrued. Some qualified business units (QBUs) can use a foreign currency. The IRS has no official exchange rate and generally accepts posted exchange rates that are consistent.

Note: When the IRS receives a tax payment in a foreign currency, the exchange rate of the date  the currency is converted to U.S. dollars by the bank processing the payment will be used.¹⁶ To keep control of the exchange rate you get when paying taxes abroad, use OFX to lock in an exchange rate for up to 12 months.

U.K. Exchange Rate for Tax Purposes

The United Kingdom provides a list of monthly exchange rates as guidance for remitting payments or calculations. These exchange rates should be used to convert any foreign currency.¹⁷

How Do I Save Money When Paying Tax Abroad?

Transferring money internationally with banks is expensive. Most banks charge a margin on the exchange rate of up to 5% in additional to hefty international transaction fees. Use OFX to pay tax abroad, so you can keep more of your hard earned cash. Our margins are substantially less than the banks’ and we can help you lock in a rate today, for payment at a later date.

If your payment date is flexible, you can use a Limit Order to set your desired exchange rate, and your payment will be made when the rate is right. These services all give you more control over your money, which is how we think it should be.

Also see: 10 things you should absolutely do before you move abroad

The post Almost everything you need to know about paying taxes abroad appeared first on Australian Times News.

1) Find a Place to Sleep

When you move internationally with a company, you may only have a few weeks of accommodation provided for you before you have to find a place to live for yourself. If possible, fly out beforehand to see some properties in person, and ask for assistance from a local realtor who can teach you about the market and its costs of living. You’ll want to check out a few different neighbourhoods before making your choice. Ask about utility hookups and which utility costs are typically included in the rent.

2) Notify Everyone About Your Move

This doesn’t just include your friends, family, and boss, but also your banks, creditors, credit card issuers, insurance providers, and other professionals who would need to know that you will be changing your address and moving overseas. Let your post office know about your move, so you can have your mail redirected. If you are a registered voter and you wish to continue voting while abroad, be sure to register as an overseas voter. When you move overseas, you’ll often be required to file an official change of address document with the tax authorities.

3) Register With the Embassy

A good way to be alerted to emergency news is by registering with your embassy. In the United States, the State Department even offers a Smart Traveler Enrollment Program (STEP) that communicates information to citizens living abroad. Other nations may have similar programs for their citizens, so check your country’s State Department equivalent to find out if there is a program that you can register for before heading off. Your embassy could help you gain access to valuable information and may be able to assist you if you need help, such as if you lose your passport or get arrested.

4) Get Your Visa

Research the visa requirements for the country that you are planning on moving to. A simple internet search will start you off on the right track. It is highly recommended that you sort your visa requirements prior to leaving, as it is often harder to get a visa or change your residency status after you have already entered a country.

5) See Your Doctor

Make an appointment with your doctor to let him or her know that you are moving abroad. You can get a full checkup before your move, and your doctor can also provide you with the vaccinations that are necessary to keep you healthy in your new country. Your doctor could also provide you with an International Certificate of Vaccination, as taking a record of your health and vaccinations with you can be helpful when seeing medical professionals abroad, especially if you happen to be in an area where an outbreak occurs and you need to prove that you have already been immunised. Also, don’t forget to refill your prescriptions, or have your doctor give you a letter of authorisation, so you can get your prescriptions abroad without taking the medications through border security. Many medications have different brand names and slightly different formulations in other countries, so check with your doctor to make sure any substitutions are appropriate for you. Be mindful that infant vaccination schedules vary in different parts of the world, so be particularly careful when getting the next scheduled vaccination for children in another country.

6) Get Travel Insurance

Some countries will require proof of travel insurance before issuing a visa to you, so do your research into requirements before you move. Give yourself enough time to enroll and to receive all of the documents that you will need to prove that you are covered.

7) Start Learning a New Language

If you are moving to a non-English speaking country, be aware that you will need to learn the new language if you want to get around easily once you settle into your new home. Because learning a new language is a long-term commitment, start as soon as possible. That way by the time you move, you should at least know the basics necessary to get around, including how to read street signs and ask for help.

8) Apply for an International Driver’s License

With an international driver’s license, you may find it easier to drive abroad, and you may need it if you are planning on renting a vehicle in most nations. Once your original driver’s license expires while you are abroad, your international license will expire as well, so you can then apply for a license in your new country of residence. Be sure to take a copy of your driving record with you when you move so that you can use it to apply for a new license and potentially avoid having to take any tests. You may also need a copy of your recent driving record for getting auto insurance, if you buy a vehicle abroad.

9) Sell What You Don’t Need

A good way to get some extra cash before your move is by selling whatever belongings you do not plan on taking with you. Once abroad, most non-essential items become cumbersome, so try to cull any items that you don’t need. If you’re leaving a home that your own, you may want to compare the market value of renting it out with the furnishings included, or putting your things into storage. No matter how careful you are with packing and preparing, your life will change in unexpected ways while abroad. You may need to adjust your household budget accordingly and expect to acquire some things new.

10) Find a Reputable International Shipping Company

To make moving abroad as easy as possible, take as little as possible. For the items that you can’t leave behind, use an international shipping company to have them securely packed and shipped. Get quotes from various companies, so you can find the most affordable match that will provide the best value. To save money, think clearly about the gap between when your shipment arrives and how long you will have to live without your things. For instance, if you can’t go a month without a frying pan or microwave, there’s not much point to paying to ship items that you’ll probably end up purchasing for immediate use. Similarly, don’t pay a premium for expedited delivery if you don’t need it. Faster shipping may increase your costs of warehousing and storage, if you haven’t found a permanent home by the time your goods arrive. And to be certain a company is a reliable choice, check its credentials and accreditations, such as FIDI Accredited International Mover (FAIM) accreditation. Avoid companies that have terrible customer reviews, that request cash or large deposits, and that don’t provide insurance or storage options.

If you liked these tips, you can delve even deeper into how to relocate to another country by reading the OFX ‘How To Manage Your Finances Abroad’

Feature courtesy OFX.com

AustralianTimes.co.uk is a proud partner with OFX on Currency Zone. Find out more about transferring your money home or abroad

The post 10 things you should absolutely do before you move abroad appeared first on Australian Times News.

Moving abroad can be challenging, especially if you have to juggle maintaining your home base for when you are ready to return, in addition to setting up your new life in a new place. But that does not mean that you can’t enjoy every minute of this experience, which so many people dream of but can’t achieve.

That is why we have compiled a few tips on how to move internationally, from packing to settling in, so you can make your journey a smooth one.

Checklist to move abroad for a year:

1. Establish where you will live.
2. Make arrangements to store what you can’t take with you, and hire an international shipping company for large items that you can’t pack.
3. Apply for all necessary documents, including your visa.
4. Open an account with OFX to transfer your savings from your domestic bank account to a new foreign account.
5. Have your mail taken care of back home.
6. Find employment, make new friends, and have an adventure!

Tip 6: Know How to Find Employment Abroad

If you do not already have a job lined up prior to completing your move, there are several ways to make your job hunt abroad easier. Once you have landed a great job, you will be more financially secure. Plus, you can use your workplace as an opportunity to make new friends who can show you around and help you acclimate to your new environment more quickly.

• To start, you can tap into the power of your existing networks, or you can attend job fairs and networking events.
• Hiring agencies may also be very helpful when it comes to landing a job abroad, especially since many of them specialise in filling temporary positions.

The post Top tips for moving abroad for a year appeared first on Australian Times News.

The post UK Election: How will the result affect the British pound? appeared first on Australian Times News.

ALSO SEE: 10 things I wish I knew before moving to the UK

1. Your Hand Will Get a Workout From All The Paperwork

In addition to planning other details for your big move, when you choose to live abroad, you’ll have to tackle a lot of paperwork.

You’ll need a passport to travel internationally, but you will also need to apply for a visa if you wish to live and work abroad. This document will allow you to remain in a country for a specified period of time and for a specific purpose. Depending upon your plans, you can apply for a short-stay visa, a long-stay visa, or a residence visa, which is what you will need to establish a permanent residence in another country.

Once you have moved into your new home, your work isn’t over yet, as you will need to apply for a work permit too (unless you are planning on retiring overseas and won’t be working). Your work permit will give you the opportunity to find employment, but this document can be difficult to obtain in some nations. Regulations vary, so make it a point to talk to a consulate office in advance in order to gather information on the application process, regulations, and requirements ahead of your move.

Other documents that you might need in order to enter a country, verify your identity, pay your taxes, clear shipments through customs, and apply for your permits might include:

• Birth certificates
• Marriage licenses or documents that prove you are eligible to get married
• Medical, dental, and immunisation records
• Tax records
• School reports and transcripts
• Divorce, adoption, and child custody paperwork
• Driver’s licenses
• Wills

Also, if you are planning on taking your pets with you, you will have to pack their veterinary records and health certificates too. You will also need to find out if your pets have to go through a mandatory quarantine period before they will be released to you in your new country.

Whew, what a workout! Once all your forms are filled out and filed, you can catch your breath, relax, and take in the fact that you’re now an expat.

2. Getting Lost Comes With The Territory

Another thing that a lot of people don’t talk about when they discuss living abroad is the exciting opportunity to test your mettle that comes from getting totally, hopelessly lost.

Once you move away from home, it is likely that, at some point, you will end up getting lost. Until you learn how to get around in your new environment, don’t be surprised to find yourself asking for directions and cursing at the GPS. Sometimes, even Google maps can’t save you when you’re on the road less travelled.

The entire act of living abroad is an exercise in wayfinding. So when you’re lost, it’s best to try to live in the moment and appreciate wherever it is you just ended up. Besides, think of all those synapses you’ll be building as you find your way home.

3. You Should Get Rid of Stuff

When moving abroad, it will be impossible to pack everything that you own, and you’ll soon find that stuff just weighs you down. Whether you choose to put your belongings in storage, give them away to friends and family, or sell them for some extra cash that you can put towards your move is entirely up to you. The key is to have a light load when going overseas, as it will make the move itself easier and less stressful.

Pack only what you really need in your new home, and leave space for the unexpected purchases you’ll need to make. (Yes, even adults need snowsuits in Finland.) 

4. You Will Feel a Range of Emotions

In the same way that you encounter daily struggles at home, whether that’s being able to get to the bus stop on time or arguing with coworkers, you will have to deal with hardships when you move abroad. But international challenges might also include things like stress from an immigration officer or the stress that comes with not speaking the native language fluently and having trouble communicating. Often your daily routines become cumbersome when you first move abroad. It’s normal to feel homesick, lonely and down one day and totally euphoric and awed the next.

The key is to let yourself move through all of these emotions, good and bad. Let them come and go, just as they would if you were living at home. Take every challenge as an opportunity to learn and grow.

5. You Need to Get Your Finances in Order

Before you can head off to start living in a brand new place, you will need to get your finances in order. One of the biggest expat mistakes that people make is failing to think ahead when it comes to banking, credit, and international payments.

The cost of living varies from city to city, so don’t assume you can afford to continue living the way you did back home. Also living overseas can be expensive, because you’ll want to travel to nearby destinations, and you’ll need a financial cushion for flying home when you need to.

Keep in mind that banks usually take a hefty 5% margin on the daily exchange rate on top of the high fees they charge to transfer money internationally. Using a dedicated currency specialist like OFX, can help you save substantially on all your international payments.

Taking The Leap

There are quite a few things that people generally won’t tell you about living abroad, but if you have an open mind and you are prepared for the good and bad that lies ahead, you will be able to make the most of your move.

Take the plunge, find yourself, and let the experience of travelling and living abroad for a while change you for the better.

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Myth #1: Forex Is a Short Term Strategy

The factors that underpin forex movements are macroeconomic factors, and most of the time, those factors don’t change that fast. So while the day to day news cycle can cause volatile swings, there are still long term trends that exist in many currency relationships.

Myth #2: You Can Make Money In Many Currency Pairs

There’s a lot to learn about the factors that influence exchange rates. From milk in New Zealand to the travertine trade in Turkey, most professionals make the most money from focusing on specialised pairs and gaining a solid understanding of those key relationships.

Myth #3: Your Forecast Is The Way To Win

Predictions and forecasts can cause you to lose sight of what’s really happening in the market due to cognitive bias. Behavioral economics has shown us that when you’re predicting, you’ll most likely end up seeing only what you want to see instead of adapting to what’s happening in real time in the market. That said, having a forecast or a level in mind is not a bad idea, it’s just that many people become too emotional and don’t stick to their plans. A common saying in trading is to “plan the trade and trade the plan”.

In order for your forecast to work, you need to detach from emotions, constantly reassess your strategy and be prepared to walk away if it’s not working.

Myth #4: The Forex Market Is Really Risky

Many people are under the false impression that the forex market is actually a riskier option than other markets. The reality is that any market, any investment, and any trade needs to be assessed, and the risks need to be contained in order to achieve the best results. More growth usually means accepting more risk whether you’re trading currencies, stocks, bonds or investing in real estate.

Myth #5: The Trend Is Your Friend

Many newcomers to forex look at historical data and long term relative exchange rates to evaluate currencies. Professionals in forex understand that the fundamental relationships, like the commodities that drive the value of the AUD, will generally hold true over the long term. That said, forex is also heavily influenced by what’s going on right now.

New governments and trade policies, political and military turmoil, populist sentiment and current economic conditions will always trump historical valuations when it comes to pricing currencies in real time.

Trade wisely with the help of facts, not myths

Overall, using forex as a component on your overall investment portfolio can be a strategic way to diversify your assets, but staying informed is critical.

Check out the Currency Zone on this site for the latest AUD and GBP values and register with OFX to get the best forex transfer rates for sending money abroad.

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1. Banking Mistake

Not retaining an address in your home country. If you don’t have a residential address in your home country, it could be hard to maintain your bank account and difficult to re-establish your credit once you make your way home again. That’s why many people change their on-file banking address so correspondences go to a parent’s house or other relative. Doing so may allow you to keep one foot in your home country even if you get most banking notifications via email.

Closing a credit card account in good standing. According to Bruce McClary, the director of media relations at ClearPoint Credit Counseling Solutions, closing a credit card in good standing could damage your overall credit score.¹ While you don’t have to keep each and every one of your accounts open while you’re living away from home, you should be careful about which ones you decide to close. It can be helpful to have credit cards in your home currency for domestic purchases, even if you have to pay $75 a year to keep to keep it open.

When you do close multiple accounts, do so one at a time over a period of time. The more accounts you close at once, the more damage you’ll do to your credit score, and the harder it will be to undo that damage. And for the cards that you do decide to keep open? Let your credit card issuers know about your move in advance. This will prevent them from thinking that suspicious activity is occurring once you start using the cards overseas.

4. Tax Filing and Financial Reporting Errors

Failing to file your taxes at home and abroad. Taxes become more complicated when you’re an expat living in another country, as you will need to meet the regulations and requirements of both your home country and your new residence. Asking tax experts for guidance will ensure you don’t incur penalties for improperly reporting your earnings when working abroad. These same experts will also alert you to tax breaks you can take advantage of as an expat.

Not reporting foreign bank accounts and investments. In addition to filing your income as an expat, you might also need to file the appropriate forms to report foreign bank accounts and investments to your home country. Otherwise, you could incur substantial penalties. Financial advisors can answer your questions regarding what accounts need to be reported, and how to go about reporting your information accurately.

5. Monetary Misfortunes

Not establishing a reasonable budget. It can be tempting to spend a lot of money in the first few weeks of being an expat as you settle in, but expat life can be unpredictable, so it’s important to spend with caution. Keeping extra money aside for things like your visa, any necessary permits, your rent, lawyer fees, unplanned holidays and transportation costs can help you make the most of your time abroad.

Not factoring in exchange rates. Your cost of living will change, becoming more expensive or more affordable, once you move abroad. So when you’re tallying up your estimated monthly expenses, factor in exchange rates. With OFX’s currency converter on the Currency Zone of this website, you can gauge how far you can stretch your money once it has been converted, and you can use their transfer service to quickly send money online without being hit with high bank margins and fees.

A Few Extra Tips for Success

Set aside additional funds in a separate bank account. Make sure this money will be easy to access as soon as you need it, in case of emergency.

If you’re planning on starting a new business venture abroad, keep in mind that cultural differences can be blinding. Give yourself some extra financial cushion and don’t assume that what works in one locale will work in another.

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Make a Smart Move

No matter where your move takes you, bring OFX along for the journey. Their 24/7 online money transfer platform will help you move your money the smart way. With OFX, you’ll save on bank fees and margins on every transaction you make. Get the great rates and speedy service you deserve from a company that works for you.

AustralianTimes.co.uk are proud partners with OFX on the Currency Zone channel on this website. Get the latest Aussie dollar exchange rates and transfer money home now.

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What should we expect

Economic data from the US has been largely positive over recent months. Unemployment has fallen and durable goods, industrial production, housing construction and retail sales have all showed signs of growth.  Naturally this has created a stronger outlook for the economy.

As a result, the Fed Futures have projected the chances of an interest rate hike from 0.25%-0.50% to 0.5% to 0.75% at an overwhelming 95% – 100%. If the Fed follow through with raising interest rates, the impact on the currency markets could be muted.

Nevertheless, a key factor in volatility will be any comments made surrounding future hikes that are likely to be scheduled as early as May next year. This future guidance will be vital to the near-term direction of the US dollar and if the Fed do decide to schedule an aggressive increase in interest rates then we could see an extension of the current trend of dollar strength.

Expect the unexpected

As it is the year of surprising outcomes, we should expect the unexpected this Wednesday. Although unlikely, the Federal Reserve may still decide to keep interest rates at current levels. Given the fallout from Brexit, the fragility of the euro, plus Trump’s election victory, the Fed may take a cautious stance.  In this scenario, there would almost undoubtedly be a hit to the US dollar. In addition, investors would be compelled to seek out better yields.

Plan for the future

At OFX, much of our work includes protecting our clients from future volatility by keeping them abreast of relevant trends.  We’ve got the right products such as: forward contracts, limit orders and spot trades to help develop a tailored strategy for businesses to ride out currency fluctuation.

To find out more, go to OFX.com

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