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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
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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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...
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.
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...
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. |
