tinaj

As the outlook looks bleak and the rate is around 2.5 at the moment I am thinking of forward buying some currency.

Has anyone done this and were there any pros / cons.
Also who did you use?

Enzo&Chloe

we have bought forward for Feb

we used http://www.hifx.co.uk

you have to register with them, which will involve sending a bill and a passport photo, just to make sure you are washing your money (Or something like that), before you can deal

you also need to pay a 10% deposit when the deal is struck...

Pros - you might not get a better exchange rate by waiting

Cons- you might have got a better exchange rate by waiting

southerner

Haven't done this personally, and probably won't when buying kiwis later this year.

Forward buying can be worth considering if you really want to lock in a rate.

Note that unless you know something that everyone doesn't then you have a 50% chance of being worse off, and a 50% chance of being better off, compared to waiting for whatever the spot rate is when you move.

Also, the spread** that banks and money changers will use will be a bit more for forward trades compared to spot trades. You won't see this from the rate they quote you.

I notice from Monday's closing prices in the FT that interbank spot rate is about 2.48 and 1 yr rate about 2.50.

So if you are happy with the forward rate you are quoted, and think it is important to know exactly how many $ you will have, then this might be a way to go. NB: presume you have sold you house and know how many pounds you have.


** Spread is the difference between sell and buy rates. It is how these guys make their money.

southerner

What outlook looks bleak? Do you mean Australia's? Or Saddam's? Maybe Wilf and PB have gotten to you with their particular views.

In practice the "rubber dollar's" value is determined by 2 major factors:
a) Australian interest rates compared to elsewhere in the world
b) the short term strength or otherwise of the US$ (being the major export partner of Australia).

It would take a far better man than me to second guess future events.

Regards...