Euro vs Pound: Score savings by delaying remittance plans to February

Dubai: Thinking of sending some cash to the UK or anywhere else in Europe? Hold on to your dirhams! Just like booking a flight, timing your money transfer can save you some serious money.

The first step is figuring out if the currency in the country you are remitting to is going to rise or fall in value soon? This can make a big difference in how much money your friends or families end up receiving after you send.

Gulf News analysed currencies like the British pound and the euro to see if a money transfer now is a win or a wait-it-out situation. While these currencies are less prone to fluctuations than some South Asian ones (think Indian rupee, Pakistani rupee, and Philippine peso), even small changes can add up to big savings when you're sending a hefty chunk of change.

Decoding Remittance Rates

Weakening currency? Wait for the drop! If your home country's currency is taking a tumble, sit tight! The exchange rate will get better as it weakens, so you can send more money later.

Currency on the rise? Send now and save! On the flip side, if your home turf's currency is getting stronger, don't delay! The exchange rate will only go up, so remitting now saves you money in the long run.

British pound to get weaker, don’t remit now!

“The British pound (GBP) or Sterling’s exchange rate has been very volatile since the year began, which would have had a similar effect on remittances and overseas transactions,” explained Jasdeep Singh, Dubai-based forex trader and analyst. “But economic pressures and rising US dollar will hurt the pound.

“With Trump's policies seen aiding the greenback further, and UK borrowing costs at their highest for 16 years, the pound has fallen to its lowest level in over a year, and will stay weak for now, and exchange rates will favour overseas remittances by February. This will reflect against the UAE dirham as well.”

Another reason analysts are flagging that the pound may soon find more room to drop in value is because the dollar’s rise in value is also supported by the US central bank seen announcing fewer rate cuts in 2025. The pound is at 0.81 against the dollar.

“Similarly, against the UAE dirham – which is pegged to the US dollar, the pound value is seen slipping from its current value of 0.22, which implies that you should avoid remitting now and instead send money when the value slips in February, to get more value for your dirhams,” added Trivedi.

How a weaker euro will aid UAE remittances

Like the British pound, the euro exchange rate has turned very volatile against the US dollar since the start of the year, and is expected to be as much in the weeks to come, analysed Pillai. It is at 0.97 versus the US dollar currently. But what will forex rates look like next month?

“A steady euro seen in previous months may have stalled remittances, but with the euro’s fortunes changing against a strengthening US dollar, it would be cost effective to postpone remittance plans as the lower valued currency should be taken advantage of before they rise,” said Pillai.

“Even though the rate of interest rate cuts by the European Central Bank benefits the currency, as long as Trump's policies aid the greenback, exchange rates will stay volatile between the Euro vs. the dollar,” Pillai agreed, which is in line with the recent forecasts from top investment banks worldwide as well.

“What this means for UAE remittances is that a weakening euro will lead to a pickup in expats sending money to anywhere in Europe, as the decline in value will be reflected against the UAE dirham as well. In other words, it would be cost effective to delay remittances to February.”

Bottom line?

When it comes to remitting the euro or the British pound, it would be comparatively cost-effective to remit in february when exchange rates turn remittance-friendly. This should provide UAE-based expats clarity on how they should plan their upcoming remittances to the UK or anywhere else in Europe.