Foreign Exchange Brokers Offer International Money Transfer

Foreign exchange brokers can offer clients a number of solutions for their international money requirements. The majority of foreign exchange transactions are spot transactions. This is an agreement to buy or sell currency at the present market value. The settlements of these trades are usually within a couple of days of the contract being made.

In the past, individuals and companies would arrange their international transfers through their banks. These deals are not always transparent and with some institutions, even today, the settlement rate might only be decided after the funds have been taken from a client’s bank account. A foreign exchange broker should be transparent in its service and charges as well as offering better exchange rates than banks. A larger foreign exchange brokerage can get the best prices from the market due to the volumes it is trading on an ongoing basis. A client can benefit by talking to an expert who is focused solely on the exchange rates.

Another useful service available through a foreign exchange broker is a forward contract. This type of contract allows a client to book a foreign exchange transaction at the current rate and the payment will be made on a date in the future. This protects clients from negative exchange rate movements in the future, which would otherwise increase the cost of their overseas property. The downside to forward contracts is that if the rates then move in your favor you miss out on that improvement as you have already agreed and fixed your rate.

However, certain FSA regulated foreign exchange brokers like World First can also deal currency options for clients. These allow clients to protect themselves at a certain exchange rate for a transfer in the future and still benefit if the rates then move in their favor. For example, in the case of a future property purchase the client knows the worst exchange rate they will receive for their property purchase in 6 months time, thereby knowing the maximum the property will cost them, however if the rates move in their favor the property will then become cheaper for them.

via Posterize