FX/Currencies General Discussion


#1

Revolut’s flagship feature is its spot interbank rate FX exchange, and the 26 currencies currently supported as part of its currency account offerings.

No other fintech challenger bank/‘neobank’ has a similar offering.

Given how this is such a major feature, odd that no thread has been created on the FX topic, so I’ve decided to take the initiative and start one here.


Revolut’s not a product intended for currency speculation nor trading (There is an upper limit on the number of exchanges that you can do in a single day.), but at the same time, it’d be great to have a discussion on this topic.

A lot of Revolut’s user base use Revolut as a currency/travel card when travelling abroad (in addition to the great number of people using it as their main card.), and a significant portion of users are attracted by the currency account feature. Therefore such a discussion might be of interest to those less acquainted with the FX market.


Happy to entertain any discussion or idea about any currency here.

Please provide, in addition to your analysis (Forecasting upwards/downwards movement, on a short/medium/long-term time scale.), some additional resources (Links, documents, …) that people can refer to.


The below discussion is not advice intended for investment purposes. Please consult a financial advisor instead.


Currency Buy and Sell rates
#2

I’ll start first.


Pound Sterling (GBP:USD):
Forecast: Up
Time-frame: Medium-term

After the UK–EU Referendum in 2016 (6/23/2016: https://en.wikipedia.org/wiki/United_Kingdom_European_Union_membership_referendum,_2016), the value of the pound sterling (GBP) dropped significantly due to fears that ‘Brexit’ might have a significantly negative impact (In terms of reducing the export market and cross-border trade with the EU, loss of ‘passporting rights’ for financial institutions based in the UK to access the Eurozone market, decreased/negative economic growth, …).

The GBP was at the lowest in the last year-and-a-half at the high $1.10s.

However, the GBP has gradually strengthened due to better prospects of the UK securing a new relationship with the UK (Following the triggering of Article 50 in March 2017, and the beginning of the withdrawal negotiations.).

The effects of the GBP depreciating has led to higher inflation in the UK, as a significant number of consumer goods are imported from abroad. A weaker GBP leads to higher cost of such goods, and therefore there is higher inflation in the economy.

To counter this increase in inflation (and with the unemployment level lowest since 1975: https://www.cnbc.com/2017/08/16/uk-unemployment-falls-again-to-lowest-since-1975-wage-growth-still-lacklustre.html), the Bank of England is getting closer to increasing interest rates.

Increased interest rates will mean that cash will get higher returns, and therefore greater global demand for the GBP. Greater global demand for the GBP will lead to the strengthening of the currency.

Naturally other political and economic events may cause this to reverse. Failure to reach a Brexit deal may lead FX traders and individuals to exchange the GBP for other currencies, causing the GBP to devalue.


#3

Great thread. I actually always wondered if it is against Terms & Conditions to speculate currencies. Revolut is not saying anything about that.

I usually max out my 6k monthly limit every month by speculating on currencies, hope it is ok.

I agree it is the number one strengh/benefit of Revolut which actually makes me a bit frustrated when I see them focusing on other stuff but this, but oh well, I understand.

I actually wish I could get another revolut offer, half Premium price for instance, with unlimited fx xchange each month. No other service. No insurance, no special offer, no lounge access, no extra withdrawal, just unlimited fx xchange… basically, an offer dedicated to revolut’s core benefit, without all the side services.


Use of ForEx
#4

It’s not in the FAQ/help section but in the Terms & Conditions.

I assume that the terms & conditions is intentionally expansive, and is only for edge case scenarios (e.g. Depositing £1,000,000 into Revolut and then using Revolut Premium for FX trading, rather than using an investment platform like IB or the private banking arm of an investment bank.).

Normal currency exchanges with reasonable amounts, but I assume that maxing out the £6,000 monthly limit will be fine.


Need to remember that currency exchange, whilst still the flagship feature of Revolut, is but one part of an expansive retail offering. A lot of other products–debit card linked to currency accounts (26 and counting!), integrations with other providers (Revolut Credit, Revolut Insurance, Revolut Wealth, …), cryptocurrencies support, …–are now under the umbrella of Revolut.


Use of ForEx
#5