It has been another difficult day for Sterling with the pound still feeling the force of yesterdays inflation report and comments from Bank of England Governor Mark Carney. Since my post yesterday the GBP/USD cross has fallen another cent and this afternoon reached a low of $1.5702, the lowest we have seen the currency pair since the 10th September 2013.
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What does todays move mean for my transfer?
A cent drop might not sound like much but it can certainly make a big difference to your transfer, especially if you are purchasing dollars. To put the move into monetary terms a transfer of £200,000 will now see you receive around $1,900 less compared to the same trade 24 hours ago.
With exchange rates now sitting at their lowest level for fourteen months it is also a great opportunity for anyone looking to sell dollars, since the end of June rates have fallen from $1.72 which now means converting $200,000 back into Sterling will see you receive over £11,000 extra.
Unfortunately no one has a crystal ball when it comes to the currency markets and the last few months have shown just how quickly things can change. The one thing I try to tell people who are thinking or buying or selling dollars is - make sure you know what tools are available to help you make the most from you transfer.
So in today's post I am going to give you a run down of the different types of currency contract that could help save you thousands of pounds.
1. Spot contract
The spot contract is the quickest, easiest and most popular way to buy and sell currency. You simply exchange one currency for another, whenever you need it.
2. Forward contract
A forward contract can help protect you from market volatility and is useful for managing your budget. You can set the price now for a transaction that will take place up to two years in the future, allowing you to fix the exact value of the currency to be paid regardless of market fluctuations.
3. Limit order
With a limit order you specify the exchange rate you are hoping to achieve – a price that may not be currently available. Your currency will automatically be purchased if the market exceeds this rate, meaning you get the price you want.
4. Stop loss order
A stop loss order instructs your broker to buy if the exchange rate goes down to a pre-determined level. When combined with a limit order, you can hold out for a better rate while protecting yourself from a sudden fall in the market.
For more information about the types of contract or to find out what rates of exchange I can offer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.
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