Foreign Currency Exchange Rates
If you want to make the most of your money and to get the best foreign currency exchange rates, contact a dedicated exchange broker. Many people go to their local bank when they want to tranfer money from one currency to another. However, your bank is rarely the cheapest option. Not only will you get a better deal on the current currency exchange rate from a broker, but a company specialising in international currency exchange rates can offer you options that your local bank is unable to provide.
Registering is easy and can often be done online without having to send any documents. Click here for a live example (opens in a new window). Payments can also be made online if you use internet banking or you can instruct your bank to transfer the funds directly to the currency exchange company.
Getting the Best Currency Exchange Rates
A good broker will advise you on the foreign currency exchange rates available to you. They will also guide you to the best contract as there are various options depending on your particular situation.
Spot contract: - an immediate exchange based on the current currency exchange rate.
- Basic forward contract: - fix the exchange rate for up to 2 years in advance for payment on a particular date.
- Flexible forward contract: - fix the exchange rate for up to 2 years in advance with a flexible date or dates for payment.
A deposit is required for forward contracts. It varies with the timescale, and is between 5% and 10% of the total amount.
Banks provide these to their large corporate clients. World First are the first independent broker to offer them to private clients in the UK for amounts over £100,000.
- Participating forward: - provides a worst rate case for the full amount on a future date and allows you to benefit from a better rate for 50% of the total if the exchange rate moves in your favour.
- Protection option: - provides a worst case rate for the full amount on a future date and allows you to benefit from a better rate for the full amount if the exchange rate moves in your favour. A premium is paid for this.
- Risk reversal: - provides a worst rate case and a predetermined best case rate for the full amount. A reduced premium is paid for this.
The above are fairly simple explanations and are for information only. There are other hedging strategies that can be used depending on your personal circumstances. You should always discuss your particular requirements with a specialist currency broker or your financial adviser.
Current Currency Exchange Rate