What is the Best Time to Send Money Home When Working Abroad?

The history of the forex market is a fascinating one, particularly in terms of how currencies are valued and exchanged in relation to one another.

Historically, for example, currencies were pegged to the rate of gold, before being aligned with the US dollar following the end of World War II. However, modern-day exchange rates are now largely free-floating, which means that currency pair valuations can fluctuate continuously according to a range of key market factors.

We’ll explore these below, while asking whether there’s an ideal time to send money home when working abroad?

What Factors Impact on Exchange Rates?

For most people, having access to an international money transfer app is all that’s required to send money home from abroad, but this means unless little unless you’re able to understand the key factors that influence real-time exchange rates.

After all, currencies valued are no longer pegged to assets such as gold or the greenback, meaning that there’s no quick or simple way of gauging live trends and price movements.

Perhaps the single biggest market influence is supply and demand, particularly in relation to the balance of international trade.

More specifically, a country that has high demand for its goods will tend to export more than it imports over time, with this increasing the demand for its local currency and the asset’s subsequent value.

The reverse is also true, so there’s no doubt that export-led economies such as Australia (AUD) and Japan (JPY) tend to boast particularly liquid and widely-traded currencies.

Currency values and exchange rates are also susceptible to various macroeconomic factors, including a nation’s base rate of interest. This is usually governed by central banks, while interest rates are typically lowered as a way of managing inflation and underpinning quantitative easing measures.

However, reduced interest rates lower the appeal of currencies to international investors, slashing capital inflows while simultaneously sending the asset’s value plunging.

So, Is There Really an Optimal Time to Send Money Abroad?

These factors are incredibly variable, while the free-floating and market regulated nature of modern exchange rates means that they’ll continue to fluctuate on a daily (and in some cases hourly) basis.

However, the question that remains is whether there’s actually an ideal time to send money home while working abroad? The short answer is ‘no’, but this doesn’t mean that you can’t optimise the timing of your own individual exchanges with a little planning and awareness.

Firstly, you’ll need to keep a close eye on real-time exchange rates, in order to track market movements and the impact of aforementioned macroeconomic factors such as interest rates, supply and demand. 

If you can review this information in line with an economic calendar and a fundamental understanding of forex market movements, you can also begin to pre-empt future exchange shifts and schedule your transactions accordingly.

If you’re using an online or mobile money transfer app, you also have the advantage of executing transactions in real-time and from anywhere. You can definitely utilise this to your advantage, although you’ll still need to account for the role played by banks in facilitating the transfer of funds.

Remember, you’ll still have to transfer cash to a secure end destination, which in most instances will be a bank account. In this case, you should avoid completing transactions during bank holidays or Sundays, as you’ll have to wait for such payments to be completed and could well see the order executed at a less favourable live exchange rate.