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...

Case Study

Ines and Kevin from Glasgow were buying a Duplex in Spain, January 2008; it was a strange scenario, they were renting before they bought. They had lived in Spain for approaching 11 months and had left their house sale money in their bank in Scotland. Because of their purchase they had been advised to use a broker. Rather than use the broker that the building company recommended, they had chosen to look on the internet. Fortunately they had found a Currency Broker. Most brokers can always beat a bank's quote, it isn't so easy to beat another broker. The Currency Broker saved Ines and Kevin €1, 300 Euros over another broker, but nearly €6, 200 Euros against the banks
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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We know that changing currency for property purchases abroad can be a daunting possibility, but if you don't proceed with caution you could be wasting £15, 000.

The whole proceeding of changing currency is complex; especially for those who may only use such a service once on their lifetime.

Foreign Currency SNIPPET...

Euro falls as ECB raises rates 25bp [at Financial Times]
- Financial Times - Thu 03, 04:35 PM
The euro fell from a 10-week high against the dollar on Thursday after the European Central Bank indicated it might have reached the end of its monetary tightening cycle.
If a currency strengthens or weakens against another, what does that actually mean to you?! In order to understand currency exchange matters, it's often easiest to review real situations with real losses or gains.

Please check out our frequently asked questions page...

Frequently Asked Questions

Foreign Currency SNIPPET...

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

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