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!

Re: Exchange rate
 

Hi

Can anyone explain how this holding works and what benefit it is to us ?

Cheers
Steve

Re: Exchange rate
 

as far as i can understand....you tell smartcurrency exchange or whoever? how much you want converted to cad or whatever currency,they buy them up for you when the rate is good as long as you have given them ,i m sure its only 5 % untill you want the rest changed!!look up the site it should explain beter than me !!hope it helps..very confusing !www.smartcurrencyexchange.com

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?

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?

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 ?

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.

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 ;)

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

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.

Re: Exchange rate
 

It's dropping :(
$2.24 today

Re: Exchange rate
 

That has nothing to do with economics. It has everything to do with the fact that I'm flying to the UK tonight. My anticipated London Pride is getting cheaper by the second.

Re: Exchange rate
 

Sold your house yet?

Re: Exchange rate
 

Enjoy! :rofl: ;)

Re: Exchange rate
 

Oh, I will, fear not.