It is not only businesses that are exposed to international markets in some way, but often expats or those working in another country are exposed too. Unlike businesses these individuals often have to accept the rate that they are given by the bank or a foreign exchange service provider such as TransferWise. What these providers often fail to inform these people is that there are ways that they can secure better rates going forward and ultimately save them money.
Here are three key ways you can secure a desired exchange rate:
If you know that there is a particular exchange rate that you need in order to get a certain amount in a new currency this can be done through a market order. A market order will automatically book a trade when the exchange rate hits the certain level you need. The benefit of this is that even if the exchange rate only hits the level you need for a matter of seconds, the order will still be put in.
Market orders can also work the other way meaning that if the market starts to move against you it is possible to set a minimum level you are happy to trade at and the trade will be activated before the exchange rate dips below that minimum value. That may sound complicated but it means that you can have a safety net that will only allow you to get a rate that is a certain level and nothing worse.
We know that for expats it is not only one-off international payments that need to be made but something money has to be sent home on a more consistent basis. If you know that you will need a certain amount of a specific currency over the year to send to family, pay for bills, etc, and the exchange rate is currently in your favour we can lock in that exchange rate for you and enable you to keep buying it at that rate for the next 12 months. This means that even if the exchange rate were to rise or drop significantly due to political or financial events the rate you are getting won’t be affected.
A forward contract allows customers to guarantee a rate for a future date, take advantage of favourable rates, protect your hard-earned money against drops in the exchange you need.
Flexible forward contract
A flexible forward contract acts in the same way as a forward contract but gives you more flexibility over the time frame of the contract and when you need to pay for the funds. This particular product is perfect when it is unsure exactly how much currency you need over the year. A flexi-forward allows you to have the currency you require to hand as and when you need it.
This is perfect for something like a house renovation where you are quoted a cost at the beginning, however, unseen issues, changes in the project, etc cause the cost to change. With a flexible forward even if you thought you needed $20,000 over the next 6 months, but in the end, you need $30,000, it’s no problem, your exchange rate is still locked in.
If you would like some more information on any of these services or current exchange rates.
by clicking here.
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