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Your Mother was right wasn’t she and what’s more, the same rule applies to so many other aspects of your life. No matter how many times you just touch the paint to see if it’s wet, it will be and you’ll leave an immovable fingerprint. It’ll dry the instant you leave it alone. And no self respecting Taxi will drive up a street when you are scanning the horizon in search of an orange light; they wait until you look the other way and then they scoot up alongside you so that you see them just too late to grab the cabbies attention. Currency exchange rates are just the same. When I started trading currencies for a living I realised very quickly that exchange rates are just like that cursed pan of water. All the time you sit and watch the exchange rate, willing it to move in your favour, it will do a fantastic donkey impression; digging its heels in and refusing to budge and inch. However, if you walk away for a moment to watch a kettle boil or check the wet paint or you fall asleep from abject boredom, the rate will whiplash all over the place until you return; at which point it will settle back into the previous narrow channel and drive you bananas all over again. It’s an age old problem and one that actually gets worse the more experienced you are. There have been too many times when I know the direction the market will take but it resolutely refuses to do so until I look the other way. If you are migrating, the exchange rate can prove to be almost as frustrating as waiting for a visa; especially if you have left everything until the last minute and have to exchange your funds at almost any price. There is a way to avoid this annoyance and it is a two part strategy. Step one is to start thinking about your currency and make plans plenty of time in advance of your move. Last minute trades are notoriously ‘kettle like’ in that the exchange rate will sit as flat as a pancake until you have to exchange; only spiking up the instant you have completed your transaction to the exchange rate you were desperate for. If you have ever looked at a chart of exchange rates, you’ll be aware that they rise and fall constantly and sometimes quite alarmingly and that provides all sorts of opportunities to catch the exchange rate you want as long as you allow the market gyrations to bring the exchange rate to you. And that can take a day, a week, a month or sometimes years. It may not get there at all of course and this is why a currency specialist is a ‘must-have’ accessory in this respect. Someone with the experience of sitting in the market watching the rates all day can make a massive difference to your understanding of what is achievable. There is nothing worse than watching the exchange rate rise to within a whisker of the rate you have targeted only to drop like a stone because you were just a tad too ambitious. Early discussion of your requirements will ensure that you aim high but only high enough to get the best of the market without missing out. And once you
have chosen your target price, don’t sit up all night watching the rates,
(remember the kettle) try placing an order with a currency specialist to
capture the best exchange rate for you. This type of order is called a
‘Limit’ order; something that you may will be familiar with if you have
traded in shares. It is a great tool used generally for speculators to
capture the highest expected price for their shares or currency but it
has been adopted by specialist currency dealers as a means for companies
and private clients to buy at the right price for the physical exchange
of funds rather than for speculation.
It is often better to get the best exchange rate for a proportion of your funds rather than missing out completely just because you haven’t finalised the exact quantity. You can always buy more of the currency you need but it can be a hassle if you overbook. The best option is to buy half or three quarters of your needs, topping up the amount once the exact amounts are clear. Of course the exchange rate might reach your chosen level well before you are ready to actually exchange your funds. That is a common occurrence and easily overcome. Your dealer should be able to offer you a forward contract to secure that exchange rate but delay the exchange of funds until your money is free. You will be asked to provide a deposit against this contract but that is a part payment taken off the balance payable when the contract is settled in full. In essence,
early planning and the use of all the information and market tolls at your
disposal will make a great difference to the wealth you arrive with in
your new home. Thankfully, as I have found so many times, once migrants
understand the advantages of using the services of a specialist, they can
relax and scrub currency off their ‘To Do’ list; along with watching kettles
and touching wet paint.
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