Exchange rate
#31
Joined: Apr 2007
Posts: 187
Re: Exchange rate
try www.smartcurrencyexchange.com!im sure they can hold the money when its a good price for you as long as you give them (i think)5% of the total to be saved!they appear to be a reputable company ,i know on ecouple that used them last year successfully!
#32
Re: Exchange rate
Hi
Can anyone explain how this holding works and what benefit it is to us ?
Cheers
Steve
Can anyone explain how this holding works and what benefit it is to us ?
Cheers
Steve
#33
Joined: Apr 2007
Posts: 187
Re: Exchange rate
#34
Re: Exchange rate
think strong pound steve, no expert, but the strengthening of the pound inexorably linked with the raise in rates due to inflation and continued spending. was hoping for an explanation on why the canadian $ isn't mirroring the yanks, which i thought generally it did. in which case would have thought $2.30 easy peasy, perhaps not so?
#35
Re: Exchange rate
with regard to buying in advance with a % deposit as mentioned several times here, has anyone first hand experience? like to know what happens if say you put £10k down and all of a sudden things change and you have to pull out of the deal, do they keep your money?, do you still have to purchase the remaining foreign funds?
#36
Re: Exchange rate
rae - I also have limited knowledge on this - but as far as I am aware it is called a "forward CONTRACT" so by that term alone, I suspect that once you're in, you're bound !
My query for anyone on this same topic - if I enter a forward contract with a foreign exchange co to buy XXX $'s at, say 2.30 - and the rate never hits that high in the time I need my $$ - what happens then? Do you just take whatever the rate is on the day you need your money ?
My query for anyone on this same topic - if I enter a forward contract with a foreign exchange co to buy XXX $'s at, say 2.30 - and the rate never hits that high in the time I need my $$ - what happens then? Do you just take whatever the rate is on the day you need your money ?
#37
Analyst for hire
Joined: Jan 2007
Location: Toronto
Posts: 1,698
Re: Exchange rate
You tend to do forward contracts based on the rate the broker is offering that day. So it gets nice and high, you call them and say you want $50,000 at today's rate, you'll pay 10% now and the rest in 5 months time.
#38
Re: Exchange rate
mmm, OK - I understood it a different way then - I thought you entered into one of these IN ANTICIPATION of what the rate might be (what you hope it will be). Need to go back and read it all again
#39
BE Enthusiast
Joined: Aug 2005
Location: Was Brentwood, Essex Now Wasaga Beach, Ontario
Posts: 895
Re: Exchange rate
the broker will give you a market ( a buy and sell price) for any given date in the future (a FRA = Forward Rate Agreement). It will be prices the market expect and any given point in the future. You can give them a price that you fancy, however they will work that order and you may never get traded with. Or they may just tell you to poke it and go elsewhere(if they are a bucket shop)!!
I you trade at a given price you are bound by that price, it is a legally binding contract. You may change up at a rate of 2.33 for 1st August 2007, if on the date the rate is 2.50 then tough luck you dealt at 2.33. However, it is 2.15 then you are quids in.
Steve666, when talking about stronger rate earlier i was referring to pound strength therefore a better rate for those of us who will be changing up our money.
MarkG, we definately agree on something, the US is screwed!! They have dug themselves into a massive hole and i can't see a way out. The Euro is increasing becoming the currency of choice, luckily for me most of my income is Euro related.
Chris
I you trade at a given price you are bound by that price, it is a legally binding contract. You may change up at a rate of 2.33 for 1st August 2007, if on the date the rate is 2.50 then tough luck you dealt at 2.33. However, it is 2.15 then you are quids in.
Steve666, when talking about stronger rate earlier i was referring to pound strength therefore a better rate for those of us who will be changing up our money.
MarkG, we definately agree on something, the US is screwed!! They have dug themselves into a massive hole and i can't see a way out. The Euro is increasing becoming the currency of choice, luckily for me most of my income is Euro related.
Chris
#40
Re: Exchange rate
You're talking about 2 different things:
1) Forward Contract. You buy a specific set exchange rate, for specific amount of $'s, for a set date. eg spot rate today is say 2.25, but expected to rise. You buy forward contract for $50,000 at 2.3 in a months time (ie 21,740GBP). Once the month is up you MUST exchange and pay 21,740GBP and will receive $50,000 (rate of 2.3).
If spot rate on that day is above 2.3, then you've effectively lost out, if it's below then you've effectively gained. The idea behind this is if you need to guarantee an exchange rate and know you'll have cash available on contract date.
BTW - An Option is the same as above - except you have the option whether or not to exchange on the contract date, or let it lapse. You pay a bigger premium for an option though.
2) You leave a deposit with exchange company, and tell them to exchange x amount of funds when spot rate hits a certain rate. The terms of such a contract will depend on the company, but I image you'd get a full refund (less maybe an admin fee - depending on size of deposit) if spot rate never reaches that level.
1) Forward Contract. You buy a specific set exchange rate, for specific amount of $'s, for a set date. eg spot rate today is say 2.25, but expected to rise. You buy forward contract for $50,000 at 2.3 in a months time (ie 21,740GBP). Once the month is up you MUST exchange and pay 21,740GBP and will receive $50,000 (rate of 2.3).
If spot rate on that day is above 2.3, then you've effectively lost out, if it's below then you've effectively gained. The idea behind this is if you need to guarantee an exchange rate and know you'll have cash available on contract date.
BTW - An Option is the same as above - except you have the option whether or not to exchange on the contract date, or let it lapse. You pay a bigger premium for an option though.
2) You leave a deposit with exchange company, and tell them to exchange x amount of funds when spot rate hits a certain rate. The terms of such a contract will depend on the company, but I image you'd get a full refund (less maybe an admin fee - depending on size of deposit) if spot rate never reaches that level.
#43
BE Enthusiast
Joined: Feb 2004
Location: British Columbia
Posts: 801
Re: Exchange rate
Sold your house yet?