Looking after your International Money Transfers – How do Currency Brokers Operate?

Why use a currency broker?

Increasingly, individuals with currency exchange requirements are forsaking their banks and turning to currency brokers. Their expertise in foreign exchange and navigating the volatile waters of the currency market mean that they’re perfectly placed to help secure their clients a more competitive exchange rate and as many brokers don’t charge fees or commission, you could save up to 5% on your transaction compared with using your bank.
They can also offer same day delivery of funds (though this usually depends on the currencies being exchanged and the location of the destination account) and a range of transfer options.

Methods for handling your currency transfer

Every currency transfer is different. You might need to move 500 Pounds a month to meet rent payments or 500,000 Pounds as a one-off transfer. The kind of transfer you need to make should dictate the currency service you use and leading brokers will have a range of options to suit.

Contract Types

Spot Contract

As you might guess from the name, with this form of contract currencies are exchanged ‘on the spot’ – with a competitive exchange rate being secured on currency purchases/sales which need to be settled immediately.

Forward Contract

If you know you’ll have a currency requirement coming up in the future and want to budget effectively, a Forward Contract can be particularly useful. With a forward contract you can fix a favourable exchange rate up to two years before you need to transfer the funds. You’ll be able to obtain the rate you fixed for your transfer even if the market moves against you afterwards.

Other Services

Limit Order

Limit orders allow you to target a specific exchange rate better than the current market level. With a limit order in place, your trade will be executed as soon as your target rate is achieved.

Stop Loss Order

This is a means of limiting your exposure to currency market volatility. If you’re worried the exchange rate may worsen but you aren’t quite ready to trade, a Stop Loss Order allows you to wait for a stronger exchange rate but lock in a worst-case rate should market conditions deteriorate.

Regular Overseas Payments

With a regular overseas payments service you can set up automated regular transfers to cover any recurrent foreign currency transactions, such as moving a pension or meeting mortgage payments. Transfers are not only conducted automatically on a specified date but will be made at a competitive exchange rate without you having to pay transfer fees or commission. As banks tend to charge between £10 and £40 per transfer, moving your money in this way could save you hundreds over the course of the year.

Factors to consider when choosing a broker to manage your transfer

Company  


TorfxGet Quote

Best Price Travel Money
TravelexGet Quote
Order currency onlineMoneycorpGet Quote
Summary
How do Currency Brokers Operate?
Article Name
How do Currency Brokers Operate?
Description
Why use a currency broker over your local high street bank in transferring money around the world.
Author