Save on Your Foreign Exchange and Avoid Hefty Bank Fees.
People moving sums abroad can avoid the banks' high rates by using a specialist FX dealers. Banks tend to charge fees each time you make a transfer and many also levy commission. Aa In addition to the British bank's charges, you may face further fees from the recipient bank.
There are basically four main places you can goto - tourist bureau de change, high street bank, private bank or foreign exchange specialists. Many if not all of us use high-street bank to switch money between currencies, perhaps to buy property abroad or because we work overseas and want to convert their earnings into sterling or Indian rupees or Euros and even Philippine pesos. Companies involved in all sorts of industries import or export goods. Manufactures have to import parts or export the finished goods and will need to buy or sell euros. Retailers buy stock from China or Europe. However, banks levy hefty fees on such foreign-exchange transactions, costing consumers hundreds of millions a year. The foreign exchange market is huge.
New advances in foreign exchange technology are enabling companies to make multiple payments in various currencies using a variety of payment methods. Doing business internationally has never been so easy and inexpensive. The world's largest non-bank foreign exchange specialists are leading the way with more competitive services and pricing challenging the banks.
Currency markets constantly fluctuate, so knowing when to make your international payments can be tricky. And in today's economic climate, it's more important than ever to make the most of your money. Whether you are buying your Australian Dollars with British Pounds, American Dollars, Euros or any other foreign currency, it pays to shop around. A currency specialist can help you do just that. They ensure you understand all the options available and can provide expert guidance on the currency markets.
Being FX knowledgeable involves having an understanding about the different types of trades available.
If you look in the Financial Times or on a news channel you will normally be able to see the inter-bank rate. This is the rate that banks change currencies between themselves and have a minimum trade size, say around 1 million pounds (GBP) - so we, the people on the street are unlikely to get the "inter-bank exchange rate".
Interbank Rates are effectively 'wholesale' trading prices that are used where large quantities of money are being exchanged by banks and financial houses. Contrary to popular belief the Interbank is not an exchange; it is a collection of communication agreements between the world's largest money center banks
For example, if the GBP EUR inter-bank rate was 1.100, and you wanted to change 20,000 british pounds (GBP) into Euros (EUR), your high street bank would probably give you a rate in the region of 1.0600, so in fact you would be getting 21,200 Euros instead of 22,000 Euros (if you bank had given you the inter-bank rate). The larger amount of money you wish to change, the rate should get better. One of the great "advertising gimmicks" of the business is "zero commissions".
Foreign Exchange companies trade in all major currencies such as British pound, US Dollars, Euro, Canadian Dollars, Japanese Yen, Australian Dollars , Danish Kroner, Singapore Dollars, Swiss Francs, South African Rand or Norwegian Kroner.
It is much cheaper through a professional foreign exchange broker. While the exchange rate through a bank will be around three to four percentage points worse than the interbank rate -- the rate at which banks exchange currency with each other -- brokers usually keep the margin within one percentage point, do not charge commission, and levy either very low transaction fees or none at all. A foreign exchange specialist will always offer a commercial rate and can even guarantee rates for up to two years.
Their job is to specifically monitor the money markets. A good specialist will have at least twenty currency dealers watching the markets on your behalf and will be readily available to provide relevant market information to enable an informed decision about when to make a transfer.
Banks on the other hand are split across a number of key remits and foreign exchange is markedly not their primary focus.
Specialist Tools -- There are a variety of specialised foreign exchange options that a good broker will provide you. Spot Deals, Forward Contracts and Limit Orders are just some of the many tools a foreign exchange specialist will provide that a bank does not.
Simple Steps -- Open an account, speak to a broker, and transfer/receive your funds.
All you are required to do is provide proof of identification and address. Aa Personalised service - A good foreign exchange specialist will not only provide a 24/7 service, but you will also be guaranteed an account handler who will open your account and remain with you throughout the life of your transactions. Banks cannot provide such a personalised service due to the sheer number of products and services they offer coupled with the number of customers they have. A foreign exchange specialist will provide you with the attention you deserve, and a personal approach that the banks may not be able to match.
Recognising this global niche market, the non-bank foreign exchange companies have made huge investments in the research and development of advanced multiple payment platforms for currency transactions. C AaAa These specialists firms have excelled because they are only in the foreign exchange business. Spreads are narrower and they are faster and more responsive moving with the volatile currency markets throughout the day and across time zones. Non-banks are changing the rules of the game in the foreign exchange and international payments space. C
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|Publication:||Khaleej Times (Dubai, United Arab Emirates)|
|Date:||Oct 6, 2009|
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