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Economy

Tips for Transferring Pounds or Dollars to Rent a Property in Barcelona

20 pound bill and euros coins
Written by Santiago

Do you intend to travel to Barcelona this year or next? If so, you’re sure to enjoy the Catalonian capital, with its amazing Sagrada Familia, a one-of-a-kind nineteenth-century basilisk designed by famed architect Antoni Gaudí. As well, as the astonishing Park Güell, Casa Batlló, plus La Rambla avenue of shops, sights and restaurants.

Whether you’re interested in football, architecture, Spanish culture, history, or good food and drink, Barcelona has something for you.

If so, when you visit Barcelona, you might like to stay in the center of the city, renting an apartment in neighborhood of El Born or near the technological district in El Poblenou.

Of course, when you travel to Spain and rent a Barcelona apartment with ShBarcelona, one of the things you may have to do beforehand is to exchange currency. After all, Barcelona is a city in Spain, part of the Eurozone, which uses the euro.

Pounds

Photo via Pixabay

The crucial point in this issue is the interbank market rate. We mean the exchange rate that multinational corporations use to exchange vast sums with each other on a daily basis. Ordinary individuals and businesses can’t access the interbank rate.

With this in mind, you’ll be pleased to hear that both the pound sterling and so-called greenback have strengthened against the euro on the interbank market recently. In the following article, we’ll also examine what might affect the interbank exchange rate in 2020. However, we can still tell you what’s happened to the interbank exchange rate recently, and why, for when you rent a Barcelona apartment.

GBP/EUR Rises Since Early August, 2020 Outlook Depends on Brexit

Still, when we read or hear about the exchange rate on the news, they normally refer to the interbank exchange rate, and we can use it to see when sterling rises versus the euro.

The British pound to euro interbank exchange rate has risen in the past three months, by around +7.6%. As a result, when you exchange GBP to EUR to rent a Barcelona property, you could now receive a higher euro total, than if you’d done so in early August.

Sterling has risen versus the euro, in part because the financial markets are more optimistic about the UK’s Brexit negotiations. Back in early August, it looked as if new UK Prime Minister Boris Johnson was both planning and aiming for a ‘No Deal’ Brexit. Since then, Mr. Johnson has made seemingly sincere efforts to reach a deal, which has alleviated the world’s investors.

Looking ahead, the pound to euro interbank exchange rate might affected, depending on if there’s a Brexit deal in the foreseeable future. In particular, if the UK and EU can find common ground, then it’s thought that this will favour the UK’s future economic growth, compared to if there’s ‘No Deal’. This could be worth keeping an eye on, for when you visit Barcelona.

US Dollar Gains Against Euro, as America’s Economy Comparatively Robust

If you’re an American visiting Barcelona to rent an apartment with ShBarcelona, it may interest you to know that the US dollar to euro interbank exchange rate has risen by +4.04% in 2019.

In fact, this interbank exchange rate stands just -1.38% below the mighty buck’s strongest versus the common currency in over two years, or since April 20th 2017.

This means that, when you exchange US dollars for euros, you might find that renting a Barcelona property is more affordable than if you’d done so in early 2017. You might also find that you’ll get more spending money in terms of euros, compared to if you’d exchanged currencies to visit Barcelona in the last couple of years.

One contributing factor why the US dollar to euro interbank exchange rate has risen so far in 2019 is because the US economy remains comparatively robust next to the Eurozone’s.

After all, US interest rates currently stand at 1.75%-2.00%, well above the euro area’s 0.0%. This suggests that the US economy can withstand higher borrowing costs, and still prosper, while the Eurozone needs taking out loans to be as cheap as possible to grow.

1 dollar bills

Photo via Pixabay

In addition, even though the United States and China have been involved in a trade war for the last 18 months, the Eurozone is arguably the biggest loser. This is because Europe, and especially Germany, exports vast amounts to the USA and China, so their economy has weakened, as global trade flows goes into reverse.

Looking to 2020, both the United States’ and Eurozone’s economic health, and the US Federal Reserve’s and European Central Bank’s comparative interest rates, could continue to affect the USD/EUR interbank exchange rate. You might like to bear this in mind, for when you exchange currencies, to visit Barcelona.

In the meantime, both the pound and US dollar have risen against the euro on the interbank market recently, which could make renting a Barcelona apartment with ShBarcelona more affordable for you.

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Santiago

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