An essential service for expats, the foreign exchange industry hasn’t been spared by the pandemic and fluctuations in stock markets.
In this article, we speak to Vanna Kadir of XE, our Foreign Exchange E-Team member in Sydney, to get an insight into the movement of money around the world.
The pandemic hits
“At the start of the pandemic, as the lockdowns started around the world, we did see a drop in international money transfers,” explained Vanna.
“Many clients were holding their liquidity close, due to increased volatility and uncertainty,” she continued, “planned purchases abroad were put on hold. Business orders were either cancelled or postponed, especially around the early months where we saw COVID-19 hit its peak in China and as a result, affecting importers in the APAC region.”
However, funds transfers continued for ‘essential services.’
Vanna commented, “whilst the pandemic has affected all business in some way, shape or form, a small portion of businesses have actually grown as a result of the pandemic such as the food, tech and healthcare industries.”
“On the individual front, payments being sent home to support families by expats have continued.”
“During increased volatility, we did see shifts in where money was being transferred to and being transferred from,” explained Vanna.
Start of the recovery
As parts of the world have started to recover whilst other parts are battling a second wave, currency markets have regained momentum.
“The AUD has remained elevated over the last month as markets have tried to price in a recovery from the COVID-19 pandemic. This is despite a renewed outbreak in Australia, albeit only relatively minor compared with the USA,” commented Vanna.
“As we head towards the end of the year, there are clouds on the horizon as case numbers keep creeping up and US / China relations look like they are set to deteriorate as the US heads towards their Presidential Election on November 3rd.”
Vanna continued, “overall, we see current levels as attractive for expats.”
“Expats should be looking at ways to mitigate their risk against currency fluctuations and speaking to their FX broker prior to the transfer, especially in this current environment where there are still many uncertainties in the local and wider economy. Risk management is paramount and will often leave you with more money,” recommended Vanna.
The ongoing effect of COVID19
“We have been operating as normal,” concluded Vanna. “The global banking system seems to be coping very well and we expect this to continue.”