Buying currency can be a minefield
Whether you need to buy euros for a property purchase in France, or are buying dollars to import products from the Far East, it is essential you obtain impartial guidance from a specialist currency broker.Why? Well regardless of whether you are buying euros or indeed any other currency, it can be a bewildering experience. Commissions and transaction charges vary considerably. Then of course you need to consider whether the receiving bank will make any deductions. For example, if you need to buy euros to complete on a property purchase but discover the receiving bank has deducted €100.00 from the amount you sent then the property sale cannot complete.
Then of course exchange rates move up and down all the time, so it can be difficult to know where to turn to when buying currency.
How Pure FX can help
Pure FX is a wholesale currency broker and offers clients impartial advice on the options available when it comes to buying or indeed selling currency.
For example, we recently received a call from a client purchasing a property in France and they had not made large money transfers before. The most obvious solution would have been for the client to wait until completion, buy euros with a spot contract and then send the euros to France.
However he had 8 weeks before completion so wanted to take advantage of this whilst exchange rates were in his favour, but did not want to tie up his capital through buying euros early. So with a forward contract we fixed his exchange rate on the total amount of euros needed and our client did not have to tie up his capital.
The outcome, well rather than us explain here is an email he sent.
Many thanks for keeping me in touch with the best exchange rate at the time you did. It looks as though I have saved £7,000 on the deal compared with waiting until now.
Thanks again!
R. Green, Devon
We will not go as far as saying that every client who buys currency with Pure FX will save £7,000 but we do pride ourselves on the service we offer and would welcome the opportunity to demonstrate our credentials.
Some advice when buying currency
We do have a page with our top tips when buying currency but just in case this has passed you by I have written some more tips below on how to best to buy, or indeed sell currency.
- Don’t use your bank to buy currency. You will not get a very good exchange rate and they cannot offer specialist guidance.
- Don’t leave it to the last minute. Talk to a specialist as soon as you know you are going to need to buy currency. That way you will have time to secure the best exchange rate.
- Exchange rates move all the time so if your target rate becomes available buy currency then.
- If you have to buy currency in the future, then talk to your currency dealer about fixing exchange rates. This will protect you from negative exchange rate movements.
- During the last 12 months the value of sterling has varied massively against many currencies including the euro and US dollar. With this in mind if your target exchange rate is available take it.
- You would be amazed how many people buy currency when the exchange rate is low. Try to avoid this as the difference can be significant.
| Currency | Currency code | Forward contract available |
|---|---|---|
| Australian Dollar | AUD | Yes |
| British Pound | GBP | Yes |
| Canadian Dollar | CAD | Yes |
| Czech Republic Koruna | CZK | No |
| Danish Kroner | DKK | Yes |
| Euro | EUR | Yes |
| Hong Kong Dollar | HKD | Yes |
| Hungarian Forint | HUF | Yes |
| Indian Rupee | INR | Yes |
| Japanese Yen | JPY | Yes |
| New Zealand Dollar | NZD | Yes |
| Norwegian Kroner | NOK | Yes |
| Polish Zloty | PLN | No |
| South African Rand | ZAR | Yes |
| Singapore Dollar | SGD | Yes |
| Swedish Kroner | SEK | Yes |
| Swiss Franc | CHF | Yes |
| Thai Baht | THB | No |
| UAE Dirham | AED | Yes |
| United States Dollar | USD | Yes |
Having a forward contract worked very well for me. The exchange rate changed for the worse after I had fixed the amount and has not recovered since.
By fixing the exchange rate through a forward cont...
