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GBP Vs. USD: Best Ways To Send Money From The UK To The USA

Updated on Nov 08, 2021
Cash

The British Pound to US Dollar (GBP/USD) exchange rate saw positive gains towards the end of October 2021. The primary catalyst of movement in the Pound to US Dollar (GBP/USD) exchange rate is likely to be investors' speculation of hikes in interest rates by the Bank of England (BoE), following a comment by the BoE Governor Andrew Bailey. 

It is a timely announcement that will recuperate market confidence after we have seen the pound (GBP) fluctuate and grind at low levels owing to multiple factors that affect GBP exchange rates including Brexit and the Coronavirus pandemic.

Will The GBP/USD Get Stronger In 2022?

There are multiple factors that affect exchange rates. Let's look at some of the factors that might have an impact on GBP/USD exchange rates in 2022

  • Economy: The factors that affect GBP/USD share a close relationship. This is applicable in the case of economies as well. For example, if the economy of the United Kingdom recovers from the recession and the pandemic at a faster rate than that of the United States, GBP will command a stronger hold against the USD, and vice versa. 

USD is widely considered a "safe-haven currency". This means when other currencies backed by other strong economies such as the Chinese Yuan seem risky, USD will rise. 

  • Interest rates: Interest rate rise is a popular measure to curb inflation, which has a huge impact on the exchange rates. Interest rate hikes or cuts are at the discretion of central banks, namely the Federal Reserve and Bank of England.
  • Geo-politics: Politics of both countries will have a huge impact on GBP/USD exchange rates. Greater uncertainty will prompt the market to free up investment in those currencies, which in term will make the currency weaker.  Uncertainties pertaining to geo-political situations, in the end, affect economies. 

Brexit had an immediate effect on GBP, which declined in value by over 8% in the 24 hours following the vote. The pound has been volatile since the 2016 Brexit announcement. As things stand, the UK and the US are not due for election until 2024. The major play on exchange rates will be dependent on how fast both the economies are able to recover

The rally of the Pound to US Dollar  (GBP/USD) exchange rate towards the end of October 2021 as investors speculate a hike in interest rates by the Bank of England (BoE), following a comment by the BoE Governor Andrew Bailey. 

Bailey said, 'Monetary policy cannot solve supply-side problems - but it will have to act and must do so if we see a risk, particularly to medium-term inflation and to medium-term inflation expectations.'

While there is no announcement at the time of writing, we expect the BoE to make an announcement by the end of the year 2021. Going into 2022, high-interest rates, ceteris paribus, will have a dramatic impact on GBP/USD. On the contrary, if the Federal Reserve Bank increases the interest rate, USD will strengthen against the dollar.

GBP will most likely be under pressure in 2022. Slow recovery and uncertainty around new strains that may prolong the pandemic woes, uncertainties over Brexit, pressure to incorporate climate change mitigation plans into economic policies while the UK suffers the biggest economic recession amongst major economies

However, the USD is still relatively weaker than the GBP. What does a strong GBP mean for an expat or someone sending money to the US from the UK? 

If you are living and working in the UK, a strong GBP means you will get more dollars for your pounds. On the contrary, if you are living and working in the US, a strong GBP means you will get fewer pounds for your dollars.

If you are someone who sends money internationally, here are the top 3 tips: 

  • Subscribe to receive a notification when the market hits your desired exchange rates
  • Compare top money transfer companies side-by-side before sending money internationally 
  • Send money online through a money transfer service provider that offers the best exchange rates at the lowest fees

International Bank Transfers From The UK To The US

Bank transfers are the most traditional and the most expensive way of sending money from the UK to the US. Banks typically charge a much higher fee compared to money transfer specialists. 

The most common type of fee incurred is a transfer fee, in addition to that, some banks also charge a "conversion fee" for converting your send currency and receive currency. 

Money transfer fees charged by UK's biggest banks:

  • Barclays: Transfer fee of standard 25 applicable. They charge an additional "overseas delivery fee" which you can choose to pay or pass on to the recipient. 
  • Lloyds: Transfer fee of 9.50. There is also an additional charge of 12 for the recipient. 
  • HSBC: Standard fee of 9 is applicable on international transfers. There is an additional 8 recipient fee.
  • Natwest: Transfer fees vary depending on the remittance amount - charges between 15 and a maximum of 40 depending on the transfer amount. 

Banks are still one of the most convenient forms of transfer. You can simply log into your UK account and initiate a wire transfer to your US bank account. If you are comfortable with high fees, you can use the convenience of a bank transfer.

If you feel like high transfer fees in addition to an already high exchange rate margins are unfair to both the sender and the recipient, send money through an online money transfer specialist. By the very definition, online money transfer specialists or service providers exist to make transferring money faster, easier, and cheaper.

Sending money through online money transfer providers also gives you the same level of convenience, saving you time and money. 

Best Way To Transfer Money From The UK To The USA In 2022

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The best way to send money to the US from the UK will depend on your needs. GBP/USD exchange rates are not the only factor that affects your remittance value. Granted that the exchange rates will be the biggest determining factor, however, most money transfer companies will not give you the mid-market exchange rates, which is the rate you see on Google or XE.com. 

Factors such as transfer fees, the speed of money transfer, security risk, transfer amount, medium of payment, and payout also have a huge impact on your remittance amount.

We recommend always comparing different offers by money transfer service providers before sending money internationally.

Here is a list of some of the best money transfer companies to send money from the UK to the USA 

Fastest Way To Send Money To The US From The UK

Most money transfer service providers process your transfer between 1-3 days. Speed is expensive because it usually comes with a premium fee.  

Xoom and Skrill are some of the fastest ways to send money from the UK to the US. 

Cash pickups are usually the fastest way to send money, your recipients can collect the money within 1-24 hours. Western Union and Small World provide cash pick-up services. 

Unless you are sending money for an emergency, the fastest ways of sending money are expensive.

The Cheapest Way To Send Money To The US From The UK

Sending money online through a money transfer specialist is the cheapest way to send money from the UK to the US.

Avoid direct bank transfers and money transfer agents. They tend to charge higher fees and offer the lowest exchange rates overall.

The cheapest money transfer specialist will depend on the day, amount of money being sent, speed of transfer. Compare them side-by-side before initiating a transfer.

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