Oct 2014 - Breaking News on Euro to US$ and UK£ Currency Exchange

Save Money, Plan Ahead - foreign currency exchange expert at Moneycorp, Carole Jaskarzec, sees the Dollar strengthening significantly.

October, 2014

We have revised our 12 month EUR to USD forecasts substantially lower to 1.10 in 12 months (the lowest forecast amongst 91 contributors in the Bloomberg Composite).

If you are a non Eurozone client (ex. US or UK) buying a property in France, your purchasing power is increasing and your down payment is worth more - either allowing you to decrease your loan to value or increase your overall budget.

WHY?
• We expect the upcoming divergence in euro area and US growth/monetary stances to be unprecedented.
• Euro monetary & fiscal stimuli have proven insufficient to stimulate growth or inflation.
• Tensions with Russia has further affected euro zone activity.
• ECB needs to increase monetary stimulus – include substantial sovereign bond purchases.
• We anticipate tje US Federal Reserve to raise rates in June 2015, with risks tilted towards March. The Fed may even be forced to hike faster than markets are pricing.

Our revised EUR to USD forecasts add upward pressure on all our global USD FX views…

GBP to USD

• We have revised our forecast lower, now 1.5700 in 12 months.
• GBP should trade more in line with positive fundamentals now event risk of Scottish Referendum is out the way.
• Signs that UK expansion was broadening as a result of investment and net exports – the significant deterioration in the euro economic outlook has turned that to a downside risk.
• We expect monetary policy to remain in focus and the prospects for earlier rate rises.
• We believe the first BoE rate hike to be in November – 25bp per quarter in the year following. The market is currently only pricing in 80% chance of a hike at the Feb meeting. As markets adjust to our view we expect GBP to benefit (mostly vs EUR).

GBP to EUR
• GBP should appreciate significantly versus the EUR as the Bank of England  moves towards tightening and the UK economy continues to outperform.
• For reasons mentioned above we foresee significant downside in EUR– now looking for GBP to EUR to reach 1.3500 in 6 months.

Revised Forecasts
                    1 m   3 m  6 m  1 y
GBP USD 1.63 1.61 1.58 1.57
GBP EUR 1.28 1.31 1.35 1.43
EUR USD 1.27 1.22 1.17 1.10

Why is it so useful?

If you are a non Eurozone client (ex. US or UK) buying a property in France, your purchasing power is increasing and your down payment is worth more - either allowing you to decrease your loan to value or increase your overall budget.

Remember that in certain situations, a mortgage can be a useful to hedge against currency exchange and allow you to choose the moment to convert currencies.

Contact us Today Save Money on Currency Exchange

France Home Finance will ensure you receive expert advice on rate and timing and most importantly save you money on the margin charged on your transfer. We are almost always able to beat what your bank will charge you!

Inheritance law in France : Major change for you in 2015

Starting August 17th, 2015, only one law will apply for all your assets, whether movable or immovable, personal or real property : the law of your country of residence.


This article offers a quick view on how it will change our habits in estate planning for foreigners living in France or owning real estate in France.

By Pierre-Alain CONIL, Bilingual French Notaire,  LL.M. Boston College Law School, PhD student and notary graduate at MOREL d’ARLEUX, HUREL, BILLECOCQ, notary law firm in Paris 6th, 15, rue des Saints Pères.

Current situation : the French réserve héréditaire

Foreigners living in France or owning a property in France learn often very early that the French quality lifestyle has a downside : being submitted to the French inheritance Law and its forced heirship system.

Basically, that means that part or all of your estate will be devolved to your heirs according to French standards. To synthesise:
- if you haven’t drafted a will : your estate goes to your closest relatives, most often your wife for a life interest and your children for the remainder.
- If you have drafted a will : it will be enforced only if you do not disinherit your children and leave them at least their forced share of your estate (1/2, 1/3, 1/4, depending on how many children you have).

To put it in another way, your estate plan that uses either a will or a trust (legal instrument that is not recognized in France by the way) to transfer everything to your spouse, leaving the children to wait for his/her death, will be seen as unlawful and will not be respected.

I know for a fact how difficult this is to accept for my foreign clients.

But I have great news for you : this is about to change.

A new European regulation starting August 2015
A new European regulation about inheritance law has been passed by the European Parliament in July 4th 2012 in order to change those rules and will start producing its effect in France on August 17th, 2015.

What will it change for foreigners? In one word : everything.

One law to govern them all

Up until August 2015, one’s estate is actually divided between movable property, devolved according to the law of the decedent’s county of residence, and immovable property, subject to the law of the country where the property is located, which often leads to applying two or more inheritance laws.

But this is about to end : starting August 17th, 2015, only one law will apply for all your assets, whether movable or immovable, personal or real property : the law of your country of residence.

Needless to say, using a sole and unique law will greatly simplify how international estates are handled.

Choosing the law applicable to your estate
Another interesting change is brought by this new regulation: not only will you have only one law applicable to your estate, but you will also be able to pick it up.

Thus, if the law that is meant to apply, ie the law of your country of residence, doesn’t please you, you will be free to replace it by the law of your country of citizenship.

Therefore, if you live in France but would rather have your properties transmitted to your heirs according to you own national inheritance law, that’s now pretty easy to do : you just have to draft a will saying so.

And if you own or buy a property in France while still living in another country and want this law to apply instead of the French one, there is no need anymore to use a civil corporation (SCI Société Civile Immobilière) to transform an immovable property into movable assets (the shares of the corporation) : all you need to do is…actually nothing. The law of you country of residence will anyway be used to govern the distribution of your French property.

New estate planning solutions

To summarize, this new regulation changes everything we know about international estate planning in France. Old habits are about to be outmoded and new techniques will favourably replace them.
Isn’t it a good time to consult your notaire for advice ?

Archives

» December, 2015: Democrats work to stop FATCA blowback

» November, 2015: Buying a Piece of France - Tax and Legal Need to Know, November 2015

» April, 2015: Paris Real Estate Outlook 2015

» October, 2014: Breaking News on Euro USD

» October, 2014: Inheritance law in France : Major change for you in 2015

» March, 2014: France Home Finance on TV

» February, 2014: French Property Tax Update 2014

» February, 2014: French Housing Market 2014

» April, 2011: France’s Economy is Looking Up

» April, 2011: Exchange Rate Forecast

» April, 2011: Outlook for European Inflation

» April, 2011: Why France is still Drawing Expats

» March, 2011: Euro Exchange Rate Outlook

» March, 2011: France World Tourism Leader

» March, 2011: Update on French Mortgages

» March, 2011: Rising French Property Values

» February, 2011: Role of the Notaire

» February, 2011: European Economic Outlook for 2011

» February, 2011: Key French Tax Deadlines for 2011

» January, 2011: The Complete Mortgage Process

» November, 2010: French Property Taxes

» November, 2010: The Benefits of Hiring a Mortgage Broker

» October, 2010: Qualifying for a French Mortgage

» September, 2010: Primary Costs Involved With a French Mortgage

» September, 2010: Fixed or Variable Mortgage Rate?

» August, 2010: French Leasebacks

» August, 2010: Compulsory French Life Insurance

» July, 2010: Commercial Real Estate Sector Must Meet Sustainable Criteria

» July, 2010: Major Decrease in U.S. Property Sales

» June, 2010: Global Real Estate Recovery

» June, 2010: Second Homes for Wealthy French Real Estate Investors

» May, 2010: Increase in Confidence of French Real Estate Market

» December, 2009: Key French tax deadlines for 2010

» October, 2009: France - the most visited country in the world in 2008

» August, 2009: Visit France Home Finance in our new location