Situation In Ukraine Causes Volatile Global Currency Markets

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Situation In Ukraine Causes Volatile Global Currency Markets

With the world gripped by the terrible situation unfolding in Ukraine, it is no surprise that the global currency markets have had a volatile couple of weeks. Much of the movement is about risk management and as a result the US Dollar, which is typically the global go-to safe-haven currency has been the main winner of the various majors, making gains of 2 cents against the Pound and 4 cents against the Euro.

Written exclusively for Expat Network by Tom Arnold of Currency Index

This reflects the movement of huge investment positions into the US Dollar, but is also exacerbated by weakness for European currencies, as much as anything, due to proximity and therefore likely impact of the war in Ukraine.

The other currency which has been dramatically impacted is the Russian Ruble, which has lost over 30% of its value. The ongoing impact of the economic sanctions that have been imposed on Russia are being felt across their economy, with the currency being terribly hit. This is only likely to continue and worsen as those sanctions are ramped up and really into effect.

Across the world the impact of the situation is also knocking on to many other currencies, with higher yielding, commodity driven currencies like the Australian Dollar, New Zealand Dollar and South African Rand all making significant gains as they receive a greater share of investors attention.

Closer to home, the Pound is doing very well against the weak Euro, achieving rates not seen since the Brexit referendum in 2016. A combination of UK interest rate rises and Ukraine fears for the Euro, weighing heavily on the currency pair. Fantastic new for those looking to buy a European holiday home though, with rates now three cents higher for GBP > EUR.

Moving Abroad Checklist

Initial Considerations

Will your partner be travelling with you?

If so, what will they be giving up in your present home and will they be able to continue with their career in your new home? You will need to check whether a separate visa is required for your partner to work or if your visa gives that right. If they are unable to work you will need to decide on the effect on your finances and what alternatives are available to give a fulfilling life (home business, training, voluntary work).

Are you taking family with you?

Moving with family raises many exciting opportunities, but also can create challenges. The HSBC Expat Explorer survey indicates that expat kids can take six months to settle in to their new country (see article). Getting young or even older children to prepare to move and leave their friends and family behind can be a challenge and should be thought through.

The options for education is another area that needs to be thought through.

Moving your child to a new country with a different education system can be a great opportunity to broaden their experience, but if they are close to key exams the timing can make this inadvisable. If you do take your family with you, it is important to decide between joining the local school system or choosing an international school.

Where will you be living?

Whether you will be living in a house or apartment, furnished or unfurnished, these decisions will affect what you need to take with you. The time you are planning to live overseas will also affect whether you should leave your property at home empty, rent it out or sell it. See the article Sell, Store or Ship.