Nowadays, currencies seem to be hitting all-time highs and all-time lows more often than ever before. Exchange rates are constantly fluctuating, causing somewhat of a headache for frequent travellers and international businesses around the world. But why do currencies fluctuate so often? The answer is relatively simple; supply and demand. The definition of supply and demand is ‘the amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price.’ Simply put, the cost of something depends on how much is available against how many people want to buy it.

The majority of the world’s currencies are bought and sold based on flexible exchange rates, meaning their prices fluctuate based on the supply and demand in the foreign exchange market. Increased demand for a particular currency or a shortage in its availability will result in a price increase. A decreased demand or an influx in supply will lower its price. The supply and demand of currency are connected to several interrelated factors, including monetary policy, inflation rates and the conditions involved with the political and economic environment. So, let’s take a look at these individually.

Monetary Policy

Through monetary policy, a country is able to stimulate its economy. Central banks attempt to control the demand for currencies by increasing or decreasing the money supply and/or benchmark interest rates. The money supply is pretty self-explanatory; this is the amount of money that is in circulation within a country. As money supply increases and the accessibility to a currency rises, the cost of borrowing money decreases. The interest rate is the price at which money can be borrowed. With low-interest rates, people are businesses are more willing and able to borrow money. With more money being borrowed and ultimately spent, the economy begins to grow. However, if the amount of money in the economy is too high and the supply of good and services do not match, prices of these goods and services may begin to inflate.

Inflation Rates

Another factor which has a huge bearing on the fluctuations of currencies is the rate of inflation. The inflation rate is defined as ‘the rate at which the general price of goods and services is increasing.’ A small amount of inflation generally indicates good economic growth, however, too much of an increase can cause the economy to become unstable, leading to depreciation and decline in value of a currency.

The interest and inflation rates of a country have a huge influence on a country’s economy. If the inflation rate gets too high, the central bank may counteract the issue by increasing interest rates. The encourages people to stop spending and save their money instead as well as stimulating foreign investment and increasing the amount of capital entering the marketplace, which results in an increased demand for a currency. Therefore, an increase in interest rates can lead to an increase in the value of a currency. Similarly, a decrease in interest rates can result in a reduction in the value of a currency.

The Political & Economic Environment

The political and economic environment of a country is the final factor that can impact fluctuations of currency. Despite investors enjoy high interest rates, they also appreciate the predictability of an investment. This is why currencies from countries that are politically stable and have a solid economy tend to have a higher demand, which results in higher exchange rates.

Markets are constantly monitoring the current and predicted economic conditions of a country. As well as money supply, interest and inflation rates, other key economic indicators such as GDP, housing, unemployment rates and trade all have an influence on the economy of a country. If these factors show a strong and growing economy, its currency will tend to rise in value as demand increases.

Political conditions also have a resounding impact on the value of a currency. If a country is in the middle of political unrest or global tensions, take Brexit for example, the currencies of that country become less attractive and demand falls. On the other hand, if a market sees the introduction of a new government that shows signs of strong economic growth, a value of the currency may grow as people begin to buy based on the good news. It can be confusing though. Many would assume that the recent resignation of Sajid Javid as Chancellor would have negatively affected the pound. A key figure and supposed close ally of the Prime Minister would surely show the world that the UK is in yet more chaos and would affect confidence. However, the pound was given a boost by this, as the expected result is that Boris Johnson will have more control over spending, and the indications is that the budget will show higher spending than previous years.


In the end, there is not one single factor that can answer the question ‘why do currencies fluctuate?’ Instead, a host of factors related to demand and supply affect the values of currency and with more knowledge regarding these factors and their implications for fluctuations, the more accurate the predictions of value become.

With Universal Partners FX, however, you limit the risk of currency fluctuations massively thanks to our innovative online money platform. Here, you are able to select your chosen currency and lock in an exchange rate that suits you, so you never have to worry about losing out on your money further down the line. Simply sign-up to a personal or business account to begin and one of our currency specialists can help you the rest of the way.

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For more information on how Universal Partners FX can help you with your online money transfers, be sure to get in touch with us today.


The business trade cycle, or simply ‘the trade cycle’ is the cycle that countries experience as all-round economic activity increases and decreases.

The trade cycle is a process that is important for countries to monitor as it has an impact on employment rates, inflation, economic performance and consumer spending. Central Banks also keep tabs on trade cycles as it influences monetary policies as well as short-term interest rates.



Each business trade cycle is made up of four different stages. These are expansion, peak, contraction and trough. These do not occur at regular intervals, however, they do have very recognisable features that help you to define when they do occur.

  • Expansion – This stage occurs between a trough and a peak and is defined through a period of economic growth. Typically during this period, gross domestic product (GDP), which measures economic output, increases at around a 2/3% range. Unemployment levels reach their natural rates of around 4/5% and inflation is around its 2% target. The stock market is also in a state known as a ‘bull market’, where an investment’s price rises over an extended period. A well-managed economy can remain in the expansion stage for many years, this is known as a Goldilocks economy. However, this stage can reach its end when the economy starts to overheat. This is when the GDP growth rate reaches greater than 3%, inflation is higher than 2% and investors are in a state of irrational exuberance.
  • Peak – This is the second stage of the business trade cycle. It is the period when the expansion stage transitions into the contraction phase. Here, the maximum limit of growth is attained, Economic indicators do not grow further as they are at their highest point. This stage marks the reversal point in the trend of economic growth where consumers being to restructure their budgets.
  • Contraction – The third stage of the business trade cycle, contraction starts at the peak and ends at the trough. Here, economic growth weakens as GDP falls below 2%. When it turns negative, this is when a ‘recession’ occurs, resulting in increases in unemployment rates, people selling their homes, income decreases, stocks entering a bear market and investors beginning to sell. Three types of events can trigger the contraction stage. These are a rapid increase in interest rates, a financial crisis or runaway inflation.
  • Trough – The fourth phase of the trade cycle is when the economy is at its lowest point. As a result of further declines in the prices and the demand and supply of both goods and services, the economy eventually reaches its negative saturation point. Here, there is extensive depletion of national income and expenditure. Before the economy can reach a new expansion stage, consumers must regain confidence again, often as a result of intervention with monetary or fiscal policies.


Who measures the business trade cycle?

The business trade cycle stages are determined by the National Bureau of Economic Research using GDP growth rates. It uses monthly economic indicators such as the sales of goods and services, employment and income levels to analyse the economy and classify which stage of the trade cycle a country is in.


Who manages the business trade cycle?

The government manages the business trade cycle and legislators use fiscal policy to influence the economy, using expansionary fiscal policy when they want to end a recession. Contractionary fiscal policy is implemented to keep economies from overheating. Central banks also influence the stages of a business trade cycle through the implementation of various monetary policies that impact the level of interest rates. The goal of economic policy is to keep the economy growing at a sustainable rate. It needs to be strong enough to create jobs for everyone who wants one but slew enough to avoid inflation.

Three factors are responsible for the initiation of each stage of the trade cycle, these are; the forces of supply and demand, the availability of capital and consumer confidence. The most important factor, however, is confidence in the future. Economies grow when there is faith in the future and in policymakers. Without this confidence and faith, economies tend to fail. This not only impacts interest rates but exchange rates also as the value of certain currencies begin to decrease. This, of course, has a massive impact on people who wish to send or transfer funds internationally as they begin to lose out by not getting value for their money.

With Universal Partners FX, you avoid the risk of poor exchange rates and losing out on your money with the ability to select and lock-in desired exchange rates using our online money platform. To learn more about how Universal Partners FX can help you with your international money transfers, be sure to get in touch with one of our currency specialists today!

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Ahead of the Bank of England’s Super Thursday meeting, the first for 2020, some investors are expecting the Bank to cut interest rates, with markets gauging a 50/50 chance of a rate cut.

On Tuesday, the pound dropped, while UK government bonds rose higher, suggesting that some currency strategists are expecting the BoE to cut its benchmark rate to 0.5 percent, from 0.75 percent.

Some economists believe that rates will either be cut this week or at the next meeting of the Bank in late March since currently there are encouraging signs that the country’s private sector is growing.

 In the Financial Times, Andrew Harman, portfolio manager at First State Investments stated that “Data from the second half of 2019 shows the UK economy was soft, although the recent January 2020 PMIs suggests a modest pick-up in economic activity [after] the election.”


How is the pound going to respond?

The British Pound has increased against the majority of leading currencies the beginning of the week, but on Tuesday it dropped against the euro and dollar ahead of Thursday's key BoE rate decision.

George Vessey, currency strategist with Western Union said: "The British Pound remains elevated but is lacking upside traction as it failed to hold at multi-week highs against the Euro and U.S. Dollar last week. If the BoE does cut rates, given the slide in inflation and lacklustre GDP growth, we can expect to see the Pound sold off." Vassey has also added: "Leaving rates unchanged may not have such an impact on Sterling as it didn’t weaken much when the probability of a rate cut jumped to 72% at the start of last week. Recent positive CBI and PMI surveys may be enough to prevent a rate cut this month, but the focus will be on sustained positive data for any real advancement in GBP upside."

With the possibility of a rate cut remaining unclear, the pound could initially fall if the Bank chooses to move on with a cut. Whatever the decision is, the pound will possibly be volatile as the result will be unexpected.

As mentioned, there are a few reasons that have driven investors to believe that the Bank might cut interest rates. Earlier in January, speeches from the Monetary Policy Committee members demonstrated their inclination towards a rate cut, with former governor Mark Carney stating that a weakness in the pound and weak economic data could lead the bank to a rate cut decision.  Indeed, economic growth has slowed down towards the end of 2019, while inflation was at 1.3% in December, below the Bank's 2.0% target.

With high volatility predicted on Thursday, all nine members of the monetary policy committee could vote for a rate cut, considering global recession fears, Brexit uncertainty, UK economic slowdown and inflation pressures.

On the other hand, if the majority votes for the rates to remain unchanged, taking into account improved business sentiment, then the pound could possibly stay flat. Ingvild Borgen Gjerde, FI and FX analyst at DNB Bank ASA clarified: "Expectations of a rate cut have fallen somewhat... and the GBP has strengthened as a result. We expect a rate cut this week but see significant risk that the BoE will remain on hold. As markets are only pricing in a 50% probability, the GBP should weaken this week if our projection materialises."

Finally, if only a very small number of members votes for a cut, then the hawkish sentiment could send the pound higher. For some analysts, economic data is not seen from a negative point of view and instead suggests that a rate cut is simply not justified. Marc-André Fongern, Head of FX Research at MAF Global Forex, noted that "The most recent UK economic data does not provide any justification for a rate cut at the end of January. The market may, therefore, be correcting its overblown expectations regarding an easing of monetary policy. Britain's economy is currently torn between the impact of potentially complex EU-UK trade negotiations and a spirit of optimism.”

If you are transferring funds abroad, contact a currency specialist such as Universal Partners FX, whose dedicated brokerage team can offer valuable support when navigating an unpredictable currency market. Give them a call today to discuss your currency transfers and schedule your next currency exchange.

IBAN Validation

If you are attempting to conduct international business, payment or money transfer, you may have come across the acronym “IBAN”. If not, it’s well worth getting acquainted.

Luckily, this blog aims to do just that. Read on for a crash course guide to IBAN validation.

What is an IBAN?

IBAN stands for International Bank Account Number, referring to the numerical identifier used to differentiate foreign bank accounts and streamline cross-border transactions.

As of 2019, there are 75 countries in total that officially use the IBAN, 34 of which are SEPA members.

Features of an IBAN

The IBAN itself consists of two letters and two digits followed by up to 30 alphanumerical characters.


Often lumped together as one in the same, IBAN and SWIFT codes are, in actual fact, separate entities used to identify different things.

While the IBAN is used to identify an individual account involved in an international transaction, a SWIFT code is used to identify a specific bank during an international transaction.

Checking an IBAN Number

IBAN validation is an effective method of minimising failed transactions when processing domestic and international payments.

For more information on IBAN numbers and IBAN validation, why not speak with one of our financial experts today? Call now on 020 7190 9559 or get in touch online by clicking the linked button below.

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Two-Factor Authentication

When signing into a website, the information typically requested consists of a simple combination of a username and password. This is often all that is needed to sign in to a user’s account.

Some websites will also include additional steps, such as security questions and PIN numbers, in order to gain access to your account.

However, perhaps the most secure means of protecting your account is to utilise two-factor authentication as a way of preventing unwanted access.

But how does it work? Our article explores the inner workings.

What is Two-Factor Authentication?

Also known as 2FA, two-factor authentication is a supplementary measure applied to the login process in order to protect your account. This provides an additional security measure to help keep your account safe.

Why Use Two-Factor Authentication?

When it comes to dealing with money and financial accounts, access by anyone other than the account holder can pose a huge issue. As such, any actions to prevent such an issue are welcome.

In order to avoid anyone else gaining unwanted access to your account, many sites have implemented two-factor authentication as a means of providing additional protection against hackers and illegal entry.

Naturally, using additional login steps to confirm your identity and grant access to your account provides additional barriers and reduces the likelihood of your account be hacked.

How Does Two-Factor Authentication Work?

As the name suggests, two-factor authentication involves a two-step process whereby you confirm your identity by using another account personal to you.

Common methods of two-factor authentication include SMS text message and voice call to your mobile phone or landline.

Upon login, you will be prompted to enter a code, which you will be sent via one of the means above. Once received, simply enter the given number to prove you are who you same you are and you will be granted access instantly. 

For more information on two-factor authentication and the benefits of account security measures, why not drop us a line today? Call now on 020 7190 9559 to speak with one of our experts or drop us an email online by clicking the button below.

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What is an ABA Routing Number

If you’re planning on transferring money to the USA, you’re going to need an ABA Routing Number in order for the transaction to go through successfully. But, if like many you’ve never heard of an ABA Routing Number, what it looks like or how to obtain one, you’re going to find sending your funds across the pond a little difficult. However, Universal Partners FX is here to help.aa

What is an ABA Routing Number?

So, first things first, an ABA Routing Number is a nine-digit code that is used to identify a United States bank. Each and every bank or financial institution in the States has an ABA Routing number, which is used by both domestic and international banks to locate the specific branch for payments to be made. Different states and regions within the United States possess different Routing Numbers, making it imperative that the correct code is entered when a payment to a US bank account is made.

An ABA Routing Number is made up of digits that identify the bank’s location as well as the Federal Reserve check processing centre that serves that specific bank.

Is an ABA Routing Number the same as a Routing Number?

Often referred to as simply a Routing Number, an ABA has several names that banks across the world use to refer to; including a Bank Routing Number and a Routing Transit Number (RTN). This obviously can lead to some confusion if and when you are dealing with different banks and financial institutions as each of them may use a different name when discussing your money transfer. These are all interchangeable, however, so just know that they are all referring to an ABA when they use these different names.

Ensuring a safe and secure money transfer

In order to send money to the USA quickly and safely, you will need to acquire the ABA Routing Number of the bank account belonging to the recipient of your transfer. If you choose to send your money through Fedwire, the transfer system operated by the US Federal Reserve Banks, you will require an ABA Routing Number. If you choose to send your funds through a SWIFT system using a BIC/SWIFT code, then a Routing Number can be provided to you optionally.

Finding an ABA Routing Number

Hopefully, when sending money to the United States, the recipient will have provided you with their Routing Number before making the payment. If for some reason, they are unsure of where to find their Routing Number, it can typically be found in the lower left-hand corner of each cheque in their cheque book. In the event that recipient is unable to provide an ABA Routing Number form their cheque book, they can find it in the account section of their online banking. If they are still unable to find their Routing Number, then you will have to get in touch with your bank in order for them to calculate the code for you prior to making your payment.

Sending money to the USA with Universal Partners FX

If you choose to send money stateside using your bank, be prepared to pay additional transaction fees on top of a poor exchange rate. With Universal Partners FX, these worries are a thing of the past. When you choose to send money internationally with us, you will receive zero transaction fees and bank-beating rates that ensure you get more for your money. Simply tell us the amount you would like to transfer and your currency pairing to receive a FREE, no-obligation quote.

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For more information on how Universal Partners FX can help with your transfer to the United States, do not hesitate to get in touch with one of our foreign exchange experts today.

What is the World Trade Organisation

The World Trade Organisation (WTO) can be seen as a number of different things. The first is a global organisation that deals with and monitors the rules of trade between nations, the second is a forum for governments across the world to negotiate trade agreements, and finally, it’s a place to settle trade disagreements. At the epicentre of the WTO lies the WTO agreements, which are negotiated and signed by the majority of the world’s trading nations and endorsed by their parliaments. The ultimate goal of the WTO is to ensure that trade between these nations flows as ‘smoothly, predictably and freely as possible.’

So, when was the WTO created? The World Trade Organisation was formed as a result of the 1986-94 negotiations known as the Uruguay Round negotiations and earlier negotiations under the General Agreement on Tariffs and Trade (GATT) which was established by a multilateral treaty of 23 countries in 1947 after the second World War. At the Uruguay Round negotiations, talks were aimed to extend the trading systems between nations into several new areas, most notably in services and intellectual property and to reform trade in the sensitive sectors of agriculture and textiles. With the final act officially establishing the WTO regime being signed 15th April 1994, known as the Marrakesh Agreement.

Functions of the WTO

Despite the WTO being driven by its member states, there’s no way that it would be able to function without its Secretariat to coordinate and organise the activities which are to be carried out. The Secretariat is made up of over 600 members of staff, including experts in law, the economy, statistics and communications, all of whom assist WTO members on a daily basis to ensure negotiations are conducted smoothly and that rules of trade are correctly applied and enforced. Functions include:

  • Trade Negotiations – WTO agreements cover goods, services and intellectual property. These spell out the principles of liberalisation and the exceptions that are allowed. They consist of individual countries’ commitments to lower customs tariffs and other barriers of trade and to open and keep open services markets as well as setting the procedures for settling trade disputes. These agreements, however, are not static. They are renegotiated from time to time where new agreements are added to the package.
  • Implementation & Monitoring – WTO agreements require governments to make their trade policies clear by letting the WTO know about laws in force and measures adopted. A number of WTO councils and committees ensure that these requirements are strictly followed and that agreements are properly implemented. Each member of the WTO must undertake occasional scrutiny of their trade policies and processes, each review containing reports by the member state concerned and the WTO Secretariat.
  • Dispute Settlement – To ensure that trade between member states of the World Trade Organisation runs smoothly, it is vital that the procedure for resolving trade quarrels are enforced accordingly. Countries bring their disputes to the WTO if they believe their rights under the agreements are being violated. Independent experts are appointed to make judgements based on interpretations of agreements and individual countries’ agreements.
  • Building Trade Capacity – WTO agreements include special provisions for developing countries such as measures to increase their trading opportunities, longer time periods to implement agreements and support to enable them to build trade capacity. The World Trade Organisation organises hundreds of technical cooperation missions to developing countries every year. Aid for Trade aims to assist developing countries to develop the infrastructure and skills needed to build their trade.
  • Outreach – In order to enhance cooperation and increasing awareness of various WTO activities, the World Trade Organisation conducts regular dialogue and communication with non-governmental organisations, parliamentarians, the media and the general public.

All of these activities are performed for a number of reasons and to achieve several goals, including:

  • Non-discrimination between trading counties
  • Enabling trade to be more inclusive with lowered barriers
  • Creating predictability and transparency of trade to encourage investment
  • Increasing competitiveness
  • Providing an advantage for developing countries
  • Protecting the environment

For more information on the World Trade Organisation, who they are, what they do and what they stand for, be sure to visit the official WTO website below.

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