Currency Exchange Case Studies

It is extremely important to understand the principles of using a currency exchange broker. If we cannot explain clearly you will go back to your trusted bank to arrange the transfer. Not only will these possibly charge for the service they'll not get the best deal. No... excuse me... they will get the same deal we can get but they will appropriately charge a higher return because they have superior overheads.

It is common for the banks to charge between 2 to 4% on top of their wholesale purchase of currency. 95 times out of 100 we will charge less than 1% (the 5% will be for third world countries, especially those with a civil war).

Rather than explain further allow us to give some real situations...

Check out our following case studies and determine which one might be similar to your own situation.
 

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Case Study
In November 2007 Simon from Gloucestershire wanted to invest in a property in Miami, mainly because the dollar was weak against the pound. He had £175, 000 to invest which was going to buy him a substantial property. He'd been given a quotation from his bank at US $1.80 / £1. A broker in comparison could achieve US $1.84 to the £1; plus of course these brokers don't charge any incidental fees. Simon if he would have gone through his bank would have got $315, 000; but because he chose a broker they were able to secure $322, 000. This saved Simon $7, 000 almost £3, 400
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Case Studies Currency Exchange continued...

Elaine and Robert were buying in Northern France; a second home, but one that required a certain amount of renovation. In November 2007 the Euro had taken a bit of a tumble, so it was imperative that they got a good deal on their currency exchange to help with funds for renovation. The property purchase price was £76, 000. Their bank had quoted an exchange rate of €1.33 / £1; whereas the broker secured a good price of €1.35. This was a particular good deal as days either side the broker could only secure a rate of €1.34. The exchange at the bank would have returned €101, 080. The broker successfully secured €102, 600; saving them €1, 520 (£1, 125). Elaine and Robert were happy with this saving as Robert had earmarked an inexpensive DIY kitchen.
Case Study

In August 2007 there was Jayne from Southampton, she was buying a property in Almeria, Spain. Her transfer was for a villa at £325, 000; a superb 5 bedroom villa with sea views. Her bank had frightened her with the exchange rate, so she decided to look elsewhere; fortunately she came to a brokers website. She was offered an exchange rate of US €1.39 / £1; they were able to offer €1.41 / £1. This meant had she continued with the bank she would have realised €451, 750 - however fortunately the broker service could manage €458, 250; saving Jayne €6, 500 (£4, 600)

Case Study

In September 2007 Dominique wanted to buy an Apline ski home in Austria. The property was valued at £295, 000. He hadn't gone to the bank as he had heard that the banks weren't always the best choice. A broker will be fully aware of what the banks charge at what rates they work with: Barclays on this day was working with an exchange rate of €1.35 / £1; the broker on the other hand could get €1.38 / £1. Using Barclays, Dominique would have received €398, 250; whereas the broker actually secured him €407, 100 which has a difference of €8, 850 (£6, 400).

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Foreign Currency SNIPPET...

Slovak PM wants crown/euro rate stronger than peg - AFX - Sun, 07:29 PM
BRATISLAVA, June 28 (Reuters (LSE: TRIL.L - news) ) - Slovak Prime Minister Robert Fico said on Saturday he wanted the conversion rate for swapping the crown for the euro in 2009 to be stronger than the unit's peg to the single currency in the pre-accession exchange rate grid.

EU countries using the euro: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain.

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