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Currency Exchange Case Studies
It is extremely important to understand the
principles of using a currency exchange broker. If we cannot explain clearly
you will go back to your trusted bank to arrange the transfer. Not only will
these possibly charge for the service they'll not get the best deal. No...
excuse me... they will get the same deal we can get but they will
appropriately charge a higher return because they have superior overheads.
It is common for the banks to charge between 2
to 4% on top of their wholesale purchase of currency. 95 times out of 100 we
will charge less than 1% (the 5% will be for third world countries,
especially those with a civil war).
Rather than explain further allow us to give
some real situations...
Check out
our following case studies and determine which one might be similar to your
own situation.
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Case Study
In November 2007 Simon from Gloucestershire wanted to invest in a property
in Miami, mainly because the dollar was weak against the pound. He had
£175, 000 to invest which was going to buy him a substantial property. He'd
been given a quotation from his bank at US $1.80 / £1. A broker in
comparison could achieve US $1.84 to the £1; plus of course these brokers
don't charge any incidental fees. Simon if he would have gone through his
bank would have got $315, 000; but because he chose a broker they were able
to secure $322, 000. This saved Simon $7, 000 almost £3, 400
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Case Studies Currency Exchange
continued...
Case Study
Natalie and Kevin from Blackburn were transferring two amounts over 3
months. They were buying a property off plan in Tenerife. Their first
payment was a deposit of €16, 500 and then a final payment of €149, 500. Their
first payment was in a period during 2007 when (February) the exchange was
good, but by May the rate had changed down a little. However their first
bank quote for the first transfer was €1.43 / £1; the broker was able to
beat that quote and consequently because of their disappointment with their
bank they didn't even get a quote for the second transfer. But the currency
broker estimated we saved them €4, 100 which is approximately £2, 800
Case Study
In August 2007 there was Jayne from Southampton, she was buying a property
in Almeria, Spain. Her transfer was for a villa at £325, 000; a superb 5
bedroom villa with sea views. Her bank had frightened her with the exchange
rate, so she decided to look elsewhere; fortunately she came to a brokers
website. She was offered an exchange rate of US €1.39 / £1; they were able
to offer €1.41 / £1. This meant had she continued with the bank she would
have realised €451, 750 - however fortunately the broker service could manage
€458, 250; saving Jayne €6, 500 (£4, 600)
Case Study
In September 2007 Dominique wanted to buy an Apline ski home in Austria. The
property was valued at £295, 000. He hadn't gone to the bank as he had heard
that the banks weren't always the best choice. A broker will be fully aware
of what the banks charge at what rates they work with: Barclays on this day
was working with an exchange rate of €1.35 / £1; the broker on the other
hand could get €1.38 / £1. Using Barclays, Dominique would have received
€398, 250; whereas the broker actually secured him €407, 100 which has a
difference of €8, 850 (£6, 400).
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We know that changing currency for property
purchases abroad can be a daunting possibility, but if you don't proceed
with caution you could be wasting £15, 000.
The whole proceeding of changing currency is
complex; especially for those who may only use such a service once on their
lifetime.
Foreign Currency SNIPPET...
Euro
close to record high amid volatility [at Financial Times]
- Financial Times - Mon, 10:40 PM
A volatile session saw the euro push towards a record high against the dollar on
Monday before taking fright, as traders weighed up just how hawkish they expect
the European Central Bank to be this week.
If a currency strengthens or weakens against another, what does that
actually mean to you?! In order to understand currency exchange matters,
it's often easiest to review real situations with real losses or gains.
Please check out our frequently asked
questions page...
Frequently Asked
Questions
Foreign Currency SNIPPET...
Euro
close to record high amid volatility [at Financial Times]
- Financial Times - Mon, 10:40 PM
A volatile session saw the euro push towards a record high against the dollar on
Monday before taking fright, as traders weighed up just how hawkish they expect
the European Central Bank to be this week.
EU countries using the euro: Austria,
Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Slovenia and Spain. |
