Selecting A Currency Exchange Partner
Overview
Selecting a currency exchange partner is one of the biggest decisions that a foreign investor will make, and actually, one of the toughest too.
There are many companies vying for your business, and it's hard to know which are reputable, and which can actually obtain the best rates for you, when tested.
A difference of just a few cents in the dollar, or pence in the pound, can make a dramatic difference to the cost of money purchases, but this is just one consideration.
Below, we have outlined the processes adopted by reputable companies, and hopefully give you a basic understanding of what to look for "before" you make this decision.
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The Process
The first step towards your currency purchase is to select a reputable currency exchange company.
You will need to pass over very personal details, so you need to ensure that you make the right decision, as there are no second chances here!
Once you have selected your currency exchange partner you need to register yourself and set up an account. This is a condition imposed by financial services regulators, but it could not be easier! Simply complete a Private Client Registration form or Company Registration form (depending on your situation) and sign to agree to the Terms and Conditions provided in an additional document.
After receiving your application form you'll be issued a client code. You quote this code every time you call/email for a rate-quote - whether you are buying or selling currency.
Ensure that your account will be allocated to a personal account manager (PAM) who you can call directly, and who can advise you with regard to any currency requirements that you have regardless of transaction size.
When your personal account is open, and you've consulted with your PAM to determine the optimal solution for your requirement, the PAM will obtain the best quote available. The rate will be relayed to you, and provided that you are happy with the quoted rate, the PAM's dealer will purchase the currency on your behalf as soon as your phone call has ended.
Your currency exchange partner will then send a contract note detailing the transaction which has taken place, and the next part of the process - transmitting the funds to their client account.
On this confirmation there are 3 simple steps;
With the right currency exchange partner, this process could not be easier!
Your new purchase currency is sent out as soon as the purchasing currency is received with the brokerage, and this will land in the beneficiary account the next working morning.
It can be quick as you need it to be.
Urgent Cases
If you are trying to meet a tight deadline you are advised to CHAPS the funds on the morning of the day before your deadline, and before your banks cut-off time. These funds will arrive from your bank in the afternoon, and you will receive your new currency the next morning.
Non-Urgent Cases
Alternatively if you are not pushed for time, a BACS transfer which takes 2-3 days will be sufficient, and again once received, the currency will be released the following morning.
Communication
From start to finish you need to be able to speak to your currency exchange partner. This is important whether you are buying or selling large or small amounts of currency, and especially so, if the transaction is of significant importance to you making or missing a contract deadline.
Ensure that the company will confirm receipt of the payment, at the latest, the day after your payment is made, and of course, keep this notice for your records. If you have any further questions simply place a call to your PAM to get an update as to the progress of your transaction.
What Influences The Foreign Exchange Markets?
As the currency market is the largest in the world, with approximately $1.3 trillion in turnover each day across the world it is inevitable that it is going to be influenced by world events too. Without too much detail, key economic data and world events will move the currency pairs.
The key currencies - USD, EURO and GBP - often take the first impact from global events as they act as havens for currency during different times of uncertainty. In addition, economic data such as the monetary policy meetings perhaps from the FED or the ECB can have a substantial impact on currency movement, often due to both speculation traders and because people want to move their currency to higher yielding assets. Therefore, more often than not, if a countries or continents interest rate is increased, then more money will flow into that country, and hence the currency will become stronger.
Hopefully this piece of information will answer alot of your questions prior to you makign the decision as to which currency exchange partner you will use. However, if you still have questions then our approved partner is SGM-fx. If you would like some more information you can email James Donaldson or visit our currency exchange partner - SGM-fx website for more detailed information.