US Dollar may have just started to turn

This is a quick notice to let you know that the US Dollar has just started to turn in value against other major currencies. Time for action, if you are looking to buy Dollars at some point soon.

If you have USD, this could be the time to sell dollars and buy into GBP, Pounds Sterling, or Euros.

GBP: USD. In May 2010, the USD was worth $1.43 to £1. It was trading this morning a £1.5970 to £1.

However, the Dollar has started strengthen. It has gained about 2 cents in a day. Good time to buy dollars? Likely!

Here is a chart showing the recent performance of the Pound against the dollar.  

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EUR:USD. In december 2009 you could buy €1.50 for every $1. during 2010, the EUR strenghened against the Dollar to around €1.21 to every $1. Recently, the dollar has strenghened against the euro to around €1.32 to $1.

Today, it looks like the dollar is strengthening after a sustained period of losses. Here is a chart demonstrating the recent downturn in value of the dollar against the euro. What has happened today, is an about-turn, and the dollar is strenghening.

The main message?

• If you have a large amount of Dollars… do something! If you want to buy your currency ahead of time, you can. With just a 10% deposit, you can fix the usd rate now, and pay the balance at a fixed point in future but keeping the current rate.
• If you want to buy, or sell, Dollars, talk to one of our currency dealers and they will set a rate at which they will contact you so that you can buy your Dollars at the best price possible.

The easiest way to look at this is; if you need to change your money at some point and you need to achieve a certain amount, then you have these options:

1. Exchange all of your Dollars at today’s rate. This is called a SPOT Contract. It ensures that you fix the rate today and you get your money transferred, to where it needs to be, in good time.
2. Exchange some of your Dollars and risk the exchange rates going in your favour by the time you need to have the rest of the money changed. This is HEDGING in its simplest form. It does mean you can sleep at night, safe in the knowledge that you’ve made sure you don’t lose too much if the rates don’t go your way.
3. Exchange your Dollars, at today’s exchange rate, with just 10% deposit. Then pay the balance when you need the money in the future. This is called a FORWARD Contract. This is the way that most of my clients are now exchanging their money. By paying just a 10% deposit, our clients can relax, safe in the knowledge that they have the right amount of money for their property purchase.

Of course, this doesn’t just apply to Dollars. It applies to any tradeable currencies.

If you have any questions on exchanging your currency, please email me, or call 0044 (1)480  458400

Aussie Dollar drops dramatically

A quick alert bulletin on the Australian Dollar

One of the major currencies saw substantial movement yesterday and you may wish to take advantage of this.

The Aussie dollar has had a rough ride on the currency markets for around a month. But the AUD dipped substantially yesterday against the US Dollar, Pound and the Euro.

Now could be a good time make your move as this slide has taken a very dramatic turn.

Yesterday:

• The Aussie dollar lost around 2 cents against the US Dollar.
• The Euro gained around 4.5 cents.
• The Pound gained around 4.4 cents

Just a month ago, the Aussie dollar was at 0.92 against the USD. It’s dipped today to 0.8356.

If you’d like to discuss how we can help you to buy, or sell Australian Dollars, please get back in touch soon. If you don’t have the full amount to trade now, but would like to buy straight away, we can do this by using a 10% deposit.

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Latest Currency Rates update

pm, May 11th 2010. Latest Currency exchange rates movements.

With the result of the British Leadership election still undecided, Germany’s Chancellor Merkel’s unwillingness to provide further “bailout” funds for the weaker EU states and better-than-predicted US non-farm payrioll news, it seems that we are in for turbulent times in the currency market.

In the UK, the markets haven’t liked the uncertainty surrounding the continuing debate on who will take over as the leading political party.

GBP to USD: The latest news from the USA suggests that they now have a robust economic performance, relative to the UK and Europe. This has led to the Pound sliding against the Dollar. It wasn’t so long ago, that we saw $1.63 to every £1. We are now seeing around 1.47.

EUR to USD: The Euro has taken a battering from the US Dollar. It was only towards the end of last year when you could get a rate of 1.50. It’s now heading down, very close to 1.25. Predictions are that the markets still don’t like the overall weakness of the economies in the Eurozone and this rate may drop further over the next few days.

GBP to EUR: The costly and hastily “cobbled together” aid package for Eurozone economies hasn’t convinced the markets, and the Pound has strengthened slightly against the euro. If economists are to be believed, we may see the Pound strengthening even more, once the political leadership has been decided.

AED to AUD: The AUD has been riding a high against the UAE Dirham. In the last year, we have seen the aussie dollar rise from around 0.3005 aud right up to around 0.3037. That’s around 10% in a year! Is this the time to consider selling Australian Dollars and buying UAE Dirhams? Maybe buy forward with just 10% deposit though us?

With currency rates fluctuating as much as they are at the moment, now may be a good time to buy your currency ahead of time buy using our “forward currency contract” mechanism. This only requires a 10% deposit initially from you.

If you would like to discuss any aspect of currency conversion with one of our experienced currency dealers, please contact us here and we will get back to you.

Worried about the state of the Pound?

How will the low Pound value, against the Euro,  affect International Estate agents?

Over the last week, we have seen the pound decline in value against the Euro. This has started to affect sales that estate agents have agreed some time ago.

Buyers are pulling out of the deals claiming that the Pound has lost so much value, that the properties they agreed to buy, some time ago, will now cost them many more pounds.

This was avoidable. Sadly, many clients chose to ignore good advice to fix the rate at a given point some months ago when the rate was around 1.17 euros to 1 Pound. They are now faced with getting around 1.08 Euros to a Pound. When put into context, with a house purchase of 200,000 euros, that´s a difference of 14,245 British Pounds!

Your buyer will now have to choose between:

1. finding the extra money
2. buying another property that´s 14,250 GBP cheaper
3. pulling out of the purchase altogether

What can Global Currency Exchange Network do about this?

There´s nothing we can do about the current exchange rate, but we can help by:

1. constantly reviewing the rate and calling your client as soon as it rises sufficiently to mitigate the perceived loss
2. register the clients for what we call a “Limit Order”. This is an agreed exchange rate that the client will be happy to buy their Euros at. In this case, it could be 1.10 euros to 1 GBP. We then call the client as soon as the currencies hit this rate and they have the option to buy at that moment. (More on how we do this later)
3. We register the clients for what we call a “stop-loss order”. This is a point at which the client has the option to buy the currency so that the loss doesn´t get any greater. Using this example, this could be set at 1.06.

How to avoid all of this in the first place?

If you send your clients to us as soon as you have them appointed, we can discuss with them ways to improve their current perceived value of the Pound against the Euro. Of course, we will offer a better rate than any bank. In addition to this, we don´t charge for the transfer or any commission.

Using this example of a 200,000 euro purchase, a bank is likely to offer a rate of 1.06 euros to the pound and we would offer 1.08. The bank is likely to charge a commission of  30 euros and a transfer charge of  up to 60 euros. Finally, we have negotiated that the local banks in Portugal and Spain won´t charge their usual recipient fee of 1% (2,000 euros). This represents a difference in charges of 2090 euros PLUS a rate difference of  3494 pounds

So by using GCEN, your client would be likely to save 5346 Pounds.

Quite a difference and likely to create a more stable sale / purchase for you

One last way to avoid this:

If the clients are introduced to us early enough, we can offer what we call a “Forward Currency Contract”. This is ideal for everyone. The client will only have to part with just 10% as a deposit (20,000 euros in pounds equivalent). After that, they have fixed the rate and can relax as their only commitment is to part with the balance on the date when the currency deal matures. This is usually set for a month after the sale is anticipated to go through. The client can complete the deal early by sending us the balance money and the property deal can go through on time.

We´re here to help you with your sales. Feel free to call one of us anytime if you think we can help.

Alison in Portugal, Marie in Costa Blanca, Lucy and Emma in Mojacar.