Scenario
In October 2008 Mr & Mrs Sherwood had found a property in Italy! After negotiating a price of €200,000 Euros buying their dream holiday home became a reality. To secure the property a 10% deposit needed to be paid within 14 days. Mr and Mrs Sherwood decided to look on the internet to beat the exchange rate being offered by their local bank.
After opening an account through Currency Today they were assisted by their appointed broker Toby Fischer who fixed a payment using a spot contract buying €20,000 Euros; at a rate of 1.2618 costing £15,850.
The couple knew the remaining 90% of the property purchase was not required until early January 2009 and felt there was no rush to purchase the remaining amount of Euros. Nonetheless after receiving advice from their broker they decided that a forward contract would be beneficial. It eliminated all foreign exchange risk and exposure to exchange rate movements.
We will always offer you the best advice to save you as much money as possible.
In October they booked an exchange rate to purchase €180,000 Euros at 1.2903 costing £139,502. The process was simple, the exchange rate was fixed for 8th January 2009 and only a 10% deposit of £13,952 was required upfront. This was followed by the final payment of £125,550.
Outcome
The decision to buy their currency on a forward contract removed all uncertainty over the Euro exchange rate which had dropped to 1.0315 by their final payment on the 8th January, resulting in a significant saving of £35,000 in 3 short stress free months.
Like Mr and Mrs Sherwood you can too enjoy substantial savings on foreign currency transfers...