elizabeth_action

Can anyone advise us on the best way to move our lump sum to Canada? I don't want to lose a large chunk of it in bad exchange rates and commission!

Tangram

www.moneycorp.com or www.hifx.com

Snort

Yes we used money corp and it didnt cost us anything, from what I understand you ask for a rate of exchange, lets say $2 to the pound, they predict when it will reach that point and advise you to get your funds into their account, they buy the amount you have asked for and the transaction is completed like that. I believe they make their share by making a few points over the agreed exchange rate, so everyone walks away happy.

Just dont ask for an unrealistic exchange rate you can also set it up to exchange on a pre aranged time date.

Edo

A while ago someone on here suggested to open an account with HSBC Canada through HSBC UK and transfer the money over. People who have, did get better rates than the market.

greghal

I agree with Paul, you should you a broker for sure, I've have used a few in the past, HIFX and Moneycorp are the 2 biggest in the market and HIFX sponsor alot of this site. In my experience these 2 don't necessarily always offer the best rates. Most companies will do the transfer for free, but they all make money in the exchange rate that they give, i currently am using www.cornhillfx.com and have found that for me they have given a stronger rate and better service than the 'big boys', as ever call a few companies and do your own research!!!

paolosmythe

i had a look at moneycorp and signed up (with no obligation to do anything) as they looked like the best and biggest outfit out there....

however the extent to which they would contact me to basically say "oi why have you not used us yet....?" gave me the impression that they were touting for trade as much as anything else... and one individual was pushy enough to almost inspire profanity on my part.

since then, i have had a look at and found far greater use, transparency and clarity from the people at rationalfx. their rates seem to be the best on a day to day basis, their process quite simple, their accessibility thru fone or 'e' to be good and transactions over £5k (if i recall correctly) are 'free'.

you place an order... they move the ordered dosh into a temporary account... you pay them and then move the ordered dosh from the temp account, into your account in canada.

if you get your order in before 2pm, i believe it can be sorted out that day, thus giving you greater confidence that the rate you see, is the rate you get!

Alan2005

We used money corp - placed a couple of orders with them, but mostly just rang up and got a quote. I would tend to use the phone rather than the internet simply because you can ask them to do better on the price (tho they will grumble if the amounts are less than 10k or so).

On a side note I wouldn't trust any of the money dealers to know what is happening in the market - they are barrow boys not analysts (money corps FX updates were always sat firmly on the fence or laughably wrong)

Hobbess

There are lots of options out there, as this thread has already proven and many others before (search for exchange or money transfer or similar)

I've used Currencies Direct, but also have an account with HiFx, Xetrade and now OANDA global transfer.

I've been watching rates recently and the OANDA one seems to be posting the best rate with a flat £15 fee. The others have no fees but have worse rates and at the larger sums you easily cover the £15 that OANDA charge by getting their better rate.

The only downside for me right now with OANDA is that they don't do forward contracts. That's where you can call today and book a cash move in the future, it means if you like the rate right now (and 1.9 seems quite good given the current markets) you can organise to get that rate but when you have the money to move.

Alan2005

Forward deals can be useful, but whilst the points added are actually based on interest rate differentials, the further out from spot you get the more margin will get added too. Be prepared to pay a premium for locking the current spot price.

Hobbess

Question for the smarter FX people, do the FX markets have contango and backwardation in them like the commodities markets? So could you in theory get a better rate on a forward contract than a current one?

So say the outlook in the UK longer term is stronger so the market thinks that in 6 months time the UK £ will be worth more compared to the CAD $ right now then the rate for a contract in 6 months should be better.

Or does that not exist for FX or at least for FX that us as individuals have access to trade and as Alan mentions the companies just take more the longer out you want a rate?

Alan2005

FX Forward points aren't quite the same as an exchange traded commodity (currency futures do exist tho, but the exchange price tends to track the OTC market forward price for the delivery date).

In theory the forward price is based on a function of the current spot rate and the interest rates for the two currencies. You want to buy CAD in 1 months time - the bank buys the CAD now and puts it into an interest bearing account for you. The bank buys the CAD with GBP, which in it has effectively lent you, so you gain the interest on CAD, but pay the interest on GBP - this difference is then used to calculate your forward points.

The forward yeild curve may be positve or negative depending on which country has the higher interest rate - it may even go up and then down if the interest rate yield curve does (usually LIBOR).

Anyway - that's the theory behind the calculation - not sure what the banks actually do with the the money in practice, they may just hedge the risk and do the deal as spot later.

Note:

1 - I've heard FX people talk about backwardation, but normally it means that the bid is higher than the offer (i've never had a good explanation of why this happens though)

2 - This is all my understanding and as I'm not an FX market professional by any means I should apologize in advance for any errors in the above.

Alan2005

Here is an example calculation with some simple numbers

You want to buy 100k GBP of CAD in 1 year.
- Current spot rate = 2.0000
- GBP borrowing rate = 5%
- CAD deposit rate = 1%

Therefore
- Bank *lends* you 100k GBP
- Bank uses it to buy 200k CAD
- You owe the bank 100k GBP
- Bank owes you 200k CAD

In one year
- 200k @ 1% = 202k CAD
- 100k @ 5% = 105k GBP

So we get a forward 'all-in' rate = 202k / 105k = 1.9238

The forward 'points' are then 1.9238 - 2.0000 = -762 (expressed in 'pips')

And the price you pay will be 1.9238 in one years time.

(apologies if this is teaching people to suck eggs)

greghal

I think the thing to remember as a couple of posters have mentioned is that forward rates are different to what people think of as futures rates, it is not based on forecasts, just interest rate differences. Personally this wouldnt put me off, it isnt a penalty because if you keep funds in pounds then you will offset the difference, with interest rates so low in the UK there shouldnt be a big difference anyway between spot and fwd.

In terms of advice no nroker can give you advice on what to do, they can only let you know what is happening in the market then you make your own decision

bagspacked

ive used transfermate.com, easy online system and they dont phone you every day to transfer

Rob_999

When using a fx broker be sure to negotiate the spread (difference between the rate they give you and the rate at which they book the trade).
They don't like to tell you this as it lets you know how much profit they make, but push them for an answer.

Depending on the amount you're transferring it should be around 0.5% (or about $0.01 off spot). For example changing GBP to CAD at spot rate of $2.00:1GBP you'll get $1.99:1GBP.