Foreign Exchange: Understand your options easily in 2020
When you’re planning to send funds internationally, a key element of foreign exchange is to consider is how you’re going to transfer your required currency. The assumption is often that your Bank will be able to offer you the most competitive exchange rate, but this is often not the case.
We recommend using the specialist foreign currency exchange service Foreign Currency Direct, who can typically help you make considerable savings when compared to the Highstreet Banks. They have helped thousands of clients transfer currency when buying a property abroad and are well placed to assist you throughout the process.
When you get in touch with FCD you will be introduced to your personal account manager who will be your point of contact for all dealings with the company. They’ll take the time to get to you know you and your needs and explain the different contract options available to you to help you manage your transfer effectively.
What are the different options available when making an international currency transfer or foreign exchange?
Spot contract
An agreement to purchase currency at the current exchange rate and pay for it immediately. Ideal for when you want to agree an exchange rate, send us the funds and have your currency available quickly.
When could I use a spot contract?
When you need to make an International payment sooner rather than later or when you already have access to your funds and want to transfer them right away.
Forward Contract
An agreement to purchase currency at a fixed rate, but at a future date up to a year in advance by paying a small deposit.
When to use a forward contract?
When you want peace of mind especially during times of market volatility. It can also be very useful if you are still waiting to receive all your funds, or you haven’t yet completed on an overseas property purchase.
Limit order
If you have an exchange rate in mind, this allows you to make sure that your funds are exchanged and as when it’s reached.
When to use a Limit Order?
This is perfect for when time is on your side. If you do not need to transfer your funds right away and you have a target exchange rate in mind.
Stop Loss
Similar to a Limit Order, but this option ensures that your funds are exchanged before they fall below your chosen rate.
When to use a Stop Loss?
This can be a good option if you want to wait and see if exchange rates move in your favour, whilst ensuring you’ll be able to purchase the minimum currency you require.
Can you use more than one contract?
Absolutely. You can use more than one contract type at a time. In many cases this can be the best choice.
For example, using a Limit Order and a Stop Loss together allows you to create a top and bottom limit, to ensure you won’t receive less than your minimum target, at the same time as allowing you to benefit from potential positive movements in the exchange rate.
How to get started
Get in touch with one of the expert foreign exchange Account Managers at Foreign Currency Direct to learn more about these contract options, as well as the economic and political events that are likely to impact your upcoming currency exchange. Give them a call on 01494 725 353. You can also visit their blog, which covers moving abroad related topics for those thinking about buying in Spain.
We have used affiliate links in this article. This means that we get a teeny percentage of your foreign exchange money (which will not affect your rates in any way) if you then sign up ad use the company’s services. However – if you would prefer to bypass this, feel free to Google for the company instead.
Elle, along with Alan, is the owner of Spain Buddy and the busy web design business – Spain Web Design by Gandy-Draper.
Born a “Norverner”, she then spent most of her life “Dann Saff” before moving to Spain in 2006. Elle’s loves are Alan, the internet, dogs, good food, and dry white wine – although not necessarily in that order.
