Written by Elly Herriman
Founder and Editor of Overseas Property Insider
Exchange rates can alter the sterling cost of an overseas property even when the agreed purchase price has not changed.
This makes economic announcements especially relevant to buyers preparing to pay a reservation fee, deposit, stage payment or final completion balance in another currency.
From 21 to 25 September, markets will be assessing central bank commentary, business activity, employment and consumer confidence following the Federal Reserve’s latest interest-rate increase.
The Fed raised its target range by 0.25 percentage points to 3.75%–4.00%. Its latest projections also indicated that another increase may follow, although future decisions will depend on incoming economic information.
Monday and Tuesday: signals from central banks
The early part of the week includes scheduled appearances by officials from the US Federal Reserve and European Central Bank.
Markets analyse these appearances for clues about future interest rates. Comments suggesting that rates may remain higher for longer can support a currency, while a more cautious outlook may have the opposite effect.
Weekly ADP employment data and UK government bond auctions may provide further direction on Tuesday.
Wednesday: business activity across three major economies
Flash Purchasing Managers’ Index figures are due from the UK, Eurozone and United States on Wednesday.
PMIs are closely followed because they provide an early indication of whether business activity is expanding or contracting.
Stronger UK data could support the pound, while stronger American figures may benefit the dollar. The performance of the Eurozone economy, alongside comments from ECB officials, could influence the euro.
The comparison between the regions matters. A positive UK result will not necessarily strengthen sterling if the corresponding US or Eurozone figures are substantially better.
Thursday: Australian employment and international trade
Australia’s employment report is scheduled for Thursday.
Current market forecasts suggest approximately 20,000 additional jobs and an unemployment rate of around 4.5%. These are expectations rather than confirmed results, and the published figures may differ.
An unexpectedly strong labour market could affect expectations for Australian interest rates and support the Australian dollar.
Germany’s Ifo business confidence report and weekly US unemployment claims are also scheduled.
The planned meeting between US President Donald Trump and Chinese President Xi Jinping may influence wider market sentiment. Any development affecting relations between the two economies could be particularly relevant to the Australian dollar and Asian currencies.
Friday: US consumers, businesses and growth
Friday’s US releases include durable goods orders, consumer sentiment, inflation expectations and an updated estimate of third-quarter economic growth from the Atlanta Federal Reserve.
These figures could help markets assess whether the US economy is remaining resilient while dealing with higher borrowing costs and continued inflationary pressure.
Stronger-than-expected results may support the dollar. Weaker figures could reduce expectations of another rate increase, although currency reactions cannot be predicted with certainty.
Currency pairs relevant to overseas buyers
Buying in the United States
GBP/USD will be influenced by the comparison between British and American economic data.
A stronger dollar would make a dollar-denominated property more expensive for a buyer converting pounds, while a stronger pound would have the opposite effect.
Buying in Europe
GBP/EUR may react to UK and Eurozone PMIs, German business confidence and ECB commentary.
Even a relatively small exchange-rate movement can change the sterling cost of a euro-denominated deposit or completion payment.
Buying in Dubai or elsewhere in the UAE
The UAE dirham is pegged to the US dollar, so GBP/AED generally reflects movements in GBP/USD.
US economic developments can therefore affect the cost of a UAE property for British buyers.
Buying in Indonesia
A stronger US dollar, higher US yields or rising oil prices could place pressure on the Indonesian rupiah and push USD/IDR higher.
GBP/IDR will also depend on the performance of sterling, so it may not move in precisely the same direction as USD/IDR.
Buying in Thailand
With limited major Thai economic data scheduled, GBP/THB is more likely to be influenced by sterling, the US dollar, energy prices and wider Asian market sentiment.
Transferring Australian dollars to Indonesia
AUD/IDR could react to Australia’s employment report and developments in US-China relations. Its direction will also depend on factors affecting the Indonesian rupiah.
What can property buyers do?
Trying to predict the exact highest or lowest point of a currency market is extremely difficult.
A more practical approach is to:
- Calculate the exchange rate used in your original property budget
- Confirm every payment amount and deadline
- Monitor the sterling value of those payments
- Leave time for banking and international transfer checks
- Ask a regulated currency specialist about the available transfer options
- Avoid waiting until completion day to arrange a substantial payment
Wednesday through Friday could produce significant market movement, but central bank comments and political announcements may affect exchange rates at any time.
Planning ahead cannot remove currency risk, but it can help buyers understand their exposure before a payment becomes urgent.
Planning an overseas property payment?
First Class Currency helps individuals and businesses arrange international transfers, including deposits, stage payments and completion funds for overseas property purchases.
Speak to First Class Currency https://affiliate.firstclasscurrency.com/fcc-opi
Affiliate disclosure: Overseas Property Insider is independently owned and editorially led. We may receive a commission if you choose to contact First Class Currency through this link, at no additional cost to you. This commercial relationship does not influence our editorial coverage.
Economic calendars and market forecasts may change. This article is provided for general educational purposes and does not constitute financial advice. Currency values can rise or fall.
Add comment
Comments