The volatility in the currency markets continues since our last newsletter with movement mainly against the Euro of up to 10% for major currencies. Since last month, sterling for example has traded between 1.02 and 1.14. Weakness in the so called “PIIGS” countries, (Portugal, Italy, Ireland, Greece, Spain) appears to be beginning to take its toll on the currency. Downgrades in Ireland and Portugal’s grading from AAA are being muted and the gap for Government bonds rates within the Eurozone is opening up. I am in regular contact with a number of currency traders and they are in agreement that this high level of volatility should reduce over coming weeks. Let’s see shall we! It seems certain that as interest rate decisions are fairly dramatic each month from many central banks, some level of volatility above historic norms will continue in the short to medium term.

In terms of finance available for property purchase in Germany, we have opened 2 new lines of finance with the Allianz and Deutsche Bank who may prove more suitable for investors with lower incomes. Loan to values with Allianz tend to be lower at around 70% but this will provide a useful route into the market for some investors who could otherwise be locked out. The Deutsche Bank have indicated that they can offer upto 80% Loan to values.  And the Dresdner Bank continue to be serving us well with finance levels at 80% in the usual case.

In a change to the promised ‘where to stay’ tip (coming soon):

We discussed in December how to make large savings on currency exchange when purchasing property overseas. If you missed this, or you would like the fact sheet, please let us know.

However, for current owners, the movement of smaller sums of money between UK and the Eurozone is often required to pay bills for example or to bring back to UK the rent accrued. In the usual case, currency exchange firms will not be interested in the transfer of sums below £10,000 and so you are left to make the trade of smaller sums with a UK bank. The usual costs are up to 4% for this service together with a flat fee, usually around £30. This deters making frequent exchanges.

Hi-FX have launched a new service this month which allows you to transfer modest amounts (£250 to £10,000) online at very low cost. The account takes around 10 minutes to set-up and you have immediate access to live market rates, which are updated every 6 seconds. The cost of each trade is set at 0.4% within the wholesale market “spot rate” which is very competitive and is only possible because the trade is conducted online without the input of a member of staff. The account is currently only open to UK bank account holders and the facility to exchange Euro back to Sterling does not come online until autumn 09. In our opinion, this product gives you quick and easy access to the currency market at a very competitive rate. It should prove useful to those making regular exchanges and, as the rate is updated every 6 seconds, gives the opportunity to take advantage of changes in prices. For more details see:

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