It seems hugely unfair that the actions of speculators in the Far East should have a direct impact upon your wealth but that is certainly the case if you are moving overseas. The actions of investors involved in so called ‘carry trades’ are distorting the currency markets and therefore the exchange rates that determine how much or how little you have in your bank account when you arrive in your new country. However, there are ways to minimise the effect of these exchange rate fluctuations and even to benefit from them as long as you have a friend in the know. 

Before you can make the best decisions on these matters, it is worth getting to grips with just how much difference these fluctuations can make to your hard earned cash and to understand a little about how these ‘carry trades’ are driving exchange rates even though their effect is largely unreported. 

The seller of US Dollars will want to give as few dollars and cents away as possible for each Pound they buy and so; in market terms, they want to exchange their funds when the USD is strong and the Pound weak. 

The Sterling – US Dollar exchange rate started the year at the wrong end of this scale and each Pound would have costs the prospective migrant $1.98. After a series of fluctuations, we saw this exchange rate drop to $1.92 and rebound again to $1.97. 

In hard cash terms that would mean a migrant with $200,000 to exchange would have gained or lost £3,150 (more than $6,000) purely dependent on the timing of their transaction.

So where do the carry trade investors fit into this fluctuation? Well what these guys do is borrow money in Japan where the base interest rate is just 0.5 percent, and invest those funds in countries where the interest rate return (yield) is far higher.

All was well until a rumour spread through the financial markets which suggested that the Bank of Japan was going to lift its interest rates; strengthening the Yen and forcing a rapid unwinding of the very transactions which have made it weak as investors rush to buy back their Yen at the weakest level they can achieve. 

I can hear you yawning and I promise not to bore you further with the minutaie of the workings of the carry trade market but I have laboured the point in order to explain just how vulnerable the exchange rate that means so much to your future wealth can be pushed and pulled by unseen and unreported factors. 

There can be few more frustrating things than watching an exchange rate slip away, costing you more and more of your money in the lead up to your planned migration. This is especially infuriating when you can see no real reason for the movement. 

This serves to explain why one of the benefits most commonly applauded by our clients is the flow of jargon free and relevant information they receive from their consultant; information which explains the market movements and takes the fear and anxiety out of the currency aspect of the migration process. 

Obviously, it’s not just the carry trade that effects exchange rates; rising and falling interest rates, as the bank of Japan rumour demonstrates, have a real impact, manufacturing output, retail sales, inflation, government borrowing and the balance of payments figures will all directly influence the value of the currency involved.  Speeches by central bankers and politicians, budget statements and even an unguarded comment from an ex civil servant can move exchange rates as traders weigh up the cause and effect and place their currency bets accordingly.

My job as a currency consultant with one of the UK’s most well respected private client dealing teams is just that. We ensure that our clients are forewarned about forthcoming events when it is appropriate, alerted when surprise events improve or damage their financial position and fully abreast of the meaning of all the conflicting data that affects their proposed exchange. 

We do this by monitoring the markets and newswires as well as the ‘market flows’; snippets of information about large or unusual transactions and we analyse events in other financial markets which may effect the currency markets. 

So rather than the norm, where a private individual will see the exchange rate on the news too late to actually take advantage of it, we make sure they see the right exchange rate when it is still being traded so that the client can grab the exchange arte they want there and then.

I know you know what I mean.