Right place, right tools, right time

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Timing is everything; or so they say but there are other elements to getting things right. Just seeing a great job is no use if you don’t have the skills and expertise to do that job.

Spotting the perfect house is of no use unless you can afford it and move fast enough to secure it. The same can be true of getting the right exchange rate for an emigration move. For example it can actually be excruciatingly painful to see a huge spike in the Sterling – Canadian Dollar exchange rate if you know you can’t take advantage of it.

So actually timing is important but there are other elements that matter too.

Taking the Sterling – Canadian Dollar exchange rate again – this can be one of the most volatile in the financial markets and for good reason; especially at the moment. No economy is immune to external factors and the Canadian economy is not alone in that. Canada’s trade with the USA makes the Canadian Dollar highly susceptible to the positive and negative economic news from Canada’s neighbour to the south. As more than 70% of Canada’s exports head into the US, the ups and downs of the US economy are almost more influential on the value of the CAD as the domestic Canadian economy. And, as so much of Canada’s export volume can be categorised as commodities, the fluctuations in the commodity markets, driven by demand from China and by supply elsewhere, does impact the loonie.

Rising employment, wages, retail spending and housing data would suggest the Pound ought to be stronger perhaps but the positive data we had from all sectors of the economy in the middle of the year has softened to some degree. It must be noted though that, in comparison with many countries, the UK economy is in rude health.

So the obvious question is what exactly you can do to plan for and take advantage of these movements. The first thing everyone says to me about planning for currency market movements is that you can’t predict the future. That is undoubtedly true and I wouldn’t claim to be some sort of soothsayer but there is nothing wrong with preparing for the worst and taking advantage of the best outcome when it presents itself.

However, Murphy’s Law tells you that the exchange rate is never ever going to be at its very best just when you are ready to convert your funds but that isn’t a reason to be concerned if you can capture the best rate when it is available but set a settlement date to suit your needs. This arrangement is known as a Forward contract and they come in many shapes and sizes to suit your needs.

Lump sum payments can be booked as individual contracts. With a good broker, such as Halo Financial, a contract can be arranged whereby you agree the exchange rate today and set the settlement date for that contract up to two years into the future.

If you have a regular monthly transfer to make for salary, rental, mortgage, pension or other needs, you can use that same forward contract facility to arrange a set amount of money to be converted at a pre-determined exchange rate each month for up to 24 months into the future. Being able to budget on a monthly basis can offer a fantastic advantage when you are on a fixed income or where an exact transfer amount has to arrive each month.

So, whilst timing is essential if you are to make the most of the exchange rate, you can use the tools that market professionals have used for years, to take advantage of that attractive exchange rate and set the ideal settlement date for your particular circumstances. Don’t worry though; it’s not about soothsaying, just good planning.
To find out how you can take advantage of positive fluctuations in the market and exchange your currency at the right time to get the best possible rate, call 020 7350 5474 or visit www.halofinancial.com

Written By David Johnson, Senior Analyst, Halo Financial

Authorised by the Financial Conduct Authority under the Payment Services Regulations 2009, FRN: 528727.

Her Majesty’s Revenue & Customs MSB registration No. 12197454.

How do I get the Best Exchange Rates17Aug2015

 

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