Edo

Has anyone noticed the £ is on its way down again?

ChrisCanning

Yes, the Pound has not had a great time recently. This quarter it is amongst the worst performers out of all currencies. The ECB decided to cut rates yesterday (which was unexpected) and this dragged the pound down with it.

My clients who send currency out to Canada are not very happy, but the clients who are sending money back from Canada to UK and Europe are very pleased.

Incidentally, at times like this, it may be worth considering a 'Forward Contract'. This allows you to fix the rate of exchange for a period of time. For example, a client who took a forward contract out in August could have 'locked-in' the rate at around 1.85 for all their transfers. Now, even though the rates have dropped-off, they would still get 1.85 meaning that they are saving even more money from the bank.

Now rates are around 1.7750, but fixing a rate here could still be a good idea if rates continue to drop. As we all know, rates of 1.50 (and below) are possible...

This is obviously a very general example of a forward contract. If it would be useful, please let me know if you would like me to post full details about how they work and the pros/cons.

Chris.

Quinna

Sure have. Have you seen the two year chart?

I have saved many thousands by paying attention to charts and the trends in currencies and right now the Pound is losing steam in a fairly dramatic way. Everything to me suggests I would send my money now.

Check this out, it really is only the last two months things have changed - GBP_to_CAD_2_year

Agree with Chris that forward contracts are an excellent way to go.

Personally I don't use them, because I have the luxury of just waiting until favourable rates arise - which usually takes years... in your case Edo if you have a set amount and you need to get it to Canada over a reasonable timeframe, I really like the forward contract idea.

Regardless of forward contracts or not - if it was my Pounds, I would be pulling the trigger on a least some of those funds.

It has been an excellent run for the GBP since Sept 2013 and 1.50 is more likely than 2.0 in the next months. In the next years however 2.0 and even possibly 2.5 I think is very possible - historically speaking.

The half glass full way to think about it is 1.77 means you just got a 27c gift.

A lot depends on your own time horizon, but I find the charts help me to make decisions removed from the news, opinions and my own biggest weakness - emotions.

ookie123

Fingers crossed it doesn't drop to much further in the next business week as we have to make a transfer and are not in a position to consider a forward contract until we are in receipt of the money from the sale of our UK home. We should have had this money over 2 weeks ago but our buyers, buyer decided to argue over some garden plants!!!! a few £'s for plants has cost us thousands of $!!!!!

Quinna

Hi ookie123,

Fingers crossed is right - Damn that is frustrating. You are still miles ahead of just a couple months ago though.

You might already have everything sorted with a money transfer company which is great.

If you want to get a least some of that money back I wrote a little PDF called the, 3 secrets to money transfer, which I learned mostly the hard way.

1) Negotiate by phone not online (as ChrisCanning has suggested as well)
2) Try before you buy (you could do that now with a small amount)
3) Register to get the actual rates

ookie123

Hi Quinna

Thank you for directing me to your PDF a very interesting read. We are registered with a money transfer company based in the UK and used them when we first arrived in Canada I have to say it was a very smooth couple of transactions. I have also, after reading your little booklet just registered with a second company. Now all we can do is sit tight and wait till the middle of next week and hope sterling can at least hold its own until then. Thank you again for your help much appreciated

ookie123

Hi Quinna and ChrisCanning

Well after 3 weeks of delay and a down turn on the exchange rate we are finally due to receive the money from the sale of our house tomorrow any last minute pieces of advice before we transfer our money over we used a company called Currencies Direct when we first came over and today Monday there buy rate is 1.7305.

Quinna

Hi ookie123,

1.765 is what I see currency as the mid-market rate. If you are getting 1.7305 right now that is a terrific deal even if you were moving a very large amount. (Of course this does change by the second but just looking at the last 12hrs it sounds like you are doing well.)

Thanks for the feedback on the 3 secrets to transfer money PDF - I tried hard to make it simple to get a great rate. Not sure if it help you directly yet, but it looks like you doing really well on the exchange rate.

Dollar cost averaging and futures may be something to consider, but these very much depend on your personal circumstances.

Maybe have a chat to the dealers at the companies you are using and weigh up your options.

As far as the rate now goes, the 3 month chart is not a pretty one but the two year charts suggests things could be a lot worse and there is a good chance they will be.

SchnookoLoly

BBC News - Scottish independence: Pound falls after referendum poll

Hasan78

so do you guys think the pound will fall further in 2-3 months as then I will plan to transfer some money to canada?

SchnookoLoly

If there's a Yes vote next week, it would not surprise me... but of course that's just conjecture.

ChrisCanning

Hi,

Sorry for my slow reply - as you can imagine the past 24/48hrs have been extremely busy in the currency markets with the pressure on the Pound.

Unfortunately the Pound has suffered with the uncertainty of the Scottish referendum. Citi today announced that if a 'Yes' vote goes through then there could be up to a 4% drop in the Pound against the US Dollar. A similar move against the CAD would make rates around 1.70!!

At this time it is very difficult to predict what will happen. A 'Yes' vote is likely to hurt the Pound, but similarly, a 'No' vote does not necessarily mean that the Pound will jump up. This is such a big topic that it may be worth me starting a new thread to open a discussion.

Ookie - Currencies Direct are a well respected company and have been making international payments for a long time. Have you already made the transfer? Don't forget that you can always ask for an improvement - I am sure that they will be able to improve the rate slightly if you ask.

Hasan - rather on guessing what will happen to the rates, I always suggest asking yourself the following question: What will annoy you more - waiting 2/3 months and seeing the rate drop, or transferring now and seeing the rate higher in 2/3 months? Different people work in different ways.

I often ask my clients that question - I get some interesting replies. If you have a particularly large amount to transfer you could consider transferring half now, and the other half in 2/3 months. That way you will benefit if rates improve, and also protect yourself if rates fall...

Chris.

Hasan78

finally did transaction...i think with good rate too.

mid-market range: 1.8104
World first rate: 1.8040
so spread is about 0.33%-0.36%

Thanks ChrisCanning for your explanation as it made it easy for me to try to get a good deal!

ChrisCanning

Great news Hasan - let me know if I can be of further help.

Chris.