Are you importing a car, boat, wine or furniture? These transactions require you to transfer money overseas and it is important to maximise the value of these particular foreign currency transfers. MyCurrencyTransfer.com can assist in finding you the best exchange rates and lowest fees from our panel of FCA regulated foreign currency specialists.
Importing a car, wine, a boat or furniture from overseas require you to be aware of currency fluctuations that can result in either losing or saving thousands of pounds on your international money transfers. Foreign exchange products such as forward contracts, flexible forward contacts, limit orders and stop loss orders can really ensure you attain the best the value on your international money transfers.
Jim imports a car and needs to pay for it by sending money to the USA. Jim needs to import a car in two months time from the USA that costs $100,000.
Late Summer, he knew that £64,909 at a rate of 1.5406 would buy him his dream $100,000 car. Jim was happy with this rate but in the back of his mind thought the rate might improve. As he only needed to transfer the money overseas in two months time, Jim adopted a 'wait and see attitude' in the hope a positive currency fluctuation by Autumn. However, the rate did not move favourably and in fact went the other way, down to 1.4862.
As he could not wait any longer, Jim now had to unnecessarily pay £67,285 for the $100,000 car. This equates to a very unnecessary loss of £2,376 pounds in a very short space of time!
By taking out a 'forward contract' with his foreign currency specialist, Jim could have hedged his bets and locked in the exchange rate at 1.5406. A forward contract helps to fix the exchange rate for a purchase in the future. This rate is fixed regardless of any adverse movement in currency between when a rate is agreed (the deal date) and when the funds are eventually transferred (known as the 'settlement' date). Fixing the exchange rate only requires a small deposit (often 10 %) within a couple days of placing the order with your foreign currency specialist.