Foreign Exchange

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Beating the Exchange Rates Movements

Beating the Exchange Rates Movements
Published:   12 Dec at 9 AM

Big foreign exchange decision? Just ask the FX Experts at TorFX for a Quote »

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 are typically used by
    individuals who would probably already have the funds in place to purchase
    their property abroad. These are simply the exchange of one currency
    for another at the current market price where the settlement happens
    within two working days. This is generally done using a foreign exchange
    broker or a bank.

  1. For people who are looking
    to pay in the future, some people use forward transactions. A foreign
    exchange forward transaction is a contract to exchange a specific amount
    of one currency for another on a future date at a predetermined rate.
    These can be arranged for any period of time - from three days to two
    years in the future. A deposit is required to hold the rate with the
    balance of the payment made on the settlement date.

  1. Currency options are also
    quite similar to forward transactions. Like a forward transaction, a
    currency option allows you to exchange a specific amount of one currency
    for another on a future date. However, rather than setting the exchange
    rate you will transact at, you can guarantee a worst case scenario rate,
    but also benefit if the rate moves in your favour. There are a number
    of currency options available and the right one for you can be tailored
    to your specific needs and appetite for risk. Currency options can be
    arranged for any period up to two years in advance. Some options require
    a premium and others are zero cost.

  1. Finally, many people whether
    paying their mortgage or sending money to a different country may need
    to send regular international payments. If you are taking out a foreign
    currency mortgage on your overseas property, you will need to make regular,
    smaller payments. But the costs could still add up if you don't shop
    around for the best foreign currency exchange rates. Currency specialists
    offer a regular payment service where exchange rates and fees are low.
    In fact, you could save hundreds of pounds every year if you make your
    regular currency transfers through a specialist currency brokerage such
    as World First rather than with your high street bank. It is worth noting
    that most of the above transactions cannot be made through the bank
    either, and you would need to talk to a specialist currency broker to
    see what would be best for your specific needs. Using a broker will
    also allow you to receive commercial exchange rates, personal service
    and professional market knowledge otherwise reserved for major global

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