Foreign Exchange Guide

Welcome to our Foreign Exchange Guide section at Foreign Exchange UK.

FX Articles

Here's our summary of the latest FX articles...

Exchange Rates - What are they and how are they calculated?

12 Dec at 9 AM - by Admin

As any seasoned traveller or holidaymaker will no doubt have already noticed, the currency exchange rates very rarely stay static and can often fluctuate greatly during the day. Many people make money from these daily fluctuations which is most commonly described as Forex trading which involves the buying and selling of different...

Currency Quotations

12 Dec at 9 AM - by Admin

The currency exchange rates are always displayed using the three letter abbreviations that are stated by the International Organisation for Standardisation (ISO) in the ISO 4217 list. This is a list of all the currencies in this three letter format and is so widely accepted throughout the world that the vast majority of banks,...

Spot Exchange Rate vs Forward Exchange Rates

12 Dec at 9 AM - by Admin
There are two different types of currency exchange rates. The first one and most simplest to explain is the spot exchange rate. The spot exchange range is simply the current exchange rate as opposed to the forward exchange rate. Forward exchange rate essentially refers to an exchange rate that is quoted and traded today but for delivery and...

Balance of Payments Model

12 Dec at 9 AM - by Admin

This model holds that a foreign exchange rate must be at its equilibrium level - the rate which produces a stable current account balance. A nation with a trade deficit will experience reduction in its foreign exchange reserves which ultimately lowers (depreciates) the value of its currency. The cheaper currency renders the...

Using a Universal Currency Converter

12 Dec at 9 AM - by Admin

For anyone contemplating trading or doing business internationally, it is almost certain that at some point you will require a currency converting calculator. However, it is important that before you do so, you understand how the exchange rates in other countries and how to ensure you have the right financial set-up in order to ensure...

Managing exchange risk: borrowing in a foreign currency

12 Dec at 9 AM - by Admin

If the Great British Pound gets weaker against a foreign currency, a company's assets in that particular currency (for example foreign currency bank deposits or investments) become increasingly valuable in terms of their GBP value. However, the liabilities become more onerous in that any loans or borrowings they have taken out in...

Effect of exchange rates on the value of assets and liabilities

12 Dec at 9 AM - by Admin

Fluctuations in the exchange rates will also have a direct impact on the value of any foreign currency denominated assets or liabilities held by a company or organisation.

Asset Ownership

For example, let's say a company or corporation has recently acquired a United States based asset which would obviously be...

Exchange Rates in Company Accounts

12 Dec at 9 AM - by Admin

When it comes to the end of the accounting period and it is time to draw up the company accounts, companies which account in Great British Pound, you need to convert payments received and sent as well as receipts in foreign currencies, and the value of any foreign currency denominated assets and liabilities, all into Great British...

Exchange Rates - Supply and Demand

12 Dec at 9 AM - by Admin

One of the key factors that effects the foreign exchange rates is the supply and demand for each particular currency. As the exchange rate increases, the demand for the currencies decreases. Similarly, if the supply of a country's currency increases, the value of that currency will decrease in relation to other currencies and more...

Money Transfers for Purchasing A House Abroad

12 Dec at 9 AM - by Admin

Whilst there are various ways of making small, regular international money transfers, when you are looking to make a transfer of a significant sum for example when purchasing a property, the people that are most likely to give a good rate are specialist Foreign Exchange brokers. It is the same when purchasing any other high value...

Overseas Pensions & Tax Havens

12 Dec at 9 AM - by Admin

Well over five million british residents have decided to move abroad during the past 10 years and unfortunately, recent problems in the strength of the GBP has affected those who rely on their UK pension. Despite this though, many UK residents continue to move abroad in search of a better life with the likes of Spain, Portugal and...

Purchasing Property Abroad: Currency Transfer Tips

12 Dec at 9 AM - by Admin

If you are contemplating purchasing a property abroad and are looking for the best currency transfer rate this is our top 5 tips on how to get the best exchange rates and make your money last longer!

1. As soon as you make your decision to purchase property, start getting daily or at the very least weakly exchange rate updates...

Link Between Exchange Rates and Inflation

12 Dec at 9 AM - by Admin

The link between exchange rates and inflation can be quite complicated as its effect can be both positive and negative. They are also similar in that both Inflation and exchange rates determine if a nation is likely to be economically stable or not.

Inflation and its effects on exchange rates can also be ascertained from the...

Safest Ways to Make International Money Transfers

12 Dec at 9 AM - by Admin

Over the last few years we have seen an incredible rise in the amount of people moving abroad in order to make the most of their better educational set-ups, better job opportunities and even their better economy in general. The majority of them have moved alone leaving their friends and family in their original country so this...

Floating Exchange Rates

12 Dec at 9 AM - by Admin

A floating exchange rate or fluctuating exchange rate as it is sometimes known is a kind of exchange rate regime that involves a currency value being allowed to fluctuate according to the foreign exchange market. Any currency that uses a floating exchange rate is known, predictably, as a foreign currency. It is essentially impossible...

Pegged Exchange Rates

12 Dec at 9 AM - by Admin

There are two different types of exchange rate systems, free and pegged. A pegged system which is also commonly referred to as a fixed system, is one that involves a fixed exchange rate that is set and artificially maintained by the government of that particular currency. This rate is then pegged to another nations currency, most...

Hybrids

12 Dec at 9 AM - by Admin

The reality of the use of these exchange rate is that it's rare to find one that is entirely floating or entirely pegged but rather it is much more common to find one that is a combination of the two. One way of doing this is for a country using a traditional pegged system can prevent the typical market panics and the potential...

Bilateral vs. effective exchange rate

12 Dec at 9 AM - by Admin

The bilateral exchange is the common way of quoting a currency in that it involves two currencies in a pair. The majority of the time the central or federal bank will be one side of the relationship and they are displayed using their three letter symbols and are displayed with the base currency at the beginning followed by another...

Beating the Exchange Rates Movements

12 Dec at 9 AM - by Admin

Making sure you do your research on the various foreign exchange transaction types is key to ensuring a the long term stability of your property purchase and making sure it's a sound investment. Foreign currency exchange deals include:

  1. The first point we will discuss is spot transactions. Spot Transactions...

Forex Brokers vs Your Banks

12 Dec at 9 AM - by Admin

When transferring large sums or even smaller sums, it is important to try and get the best rate, even small differentials in exchange rates can make a huge difference to the amounts concerned. Even a small increase of 1% on a £100,000 fee is £1000. This is a lot of money in it's self but when you think that many transfers even on a...

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