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World First

World First

Minimum Transfer
Max Transfer Fee
Margin Rate
Rate Per Single Unit
100000 GBP
gets you
FCA Regulated
£1000
0
0.9%
1.105
110,471.73 EUR
FCA Regulated

UKforex

UKforex

Minimum Transfer
Max Transfer Fee
Margin Rate
Rate Per Single Unit
100000 GBP
gets you
FCA Regulated
£5000
7
1%
1.104
110,360.25 EUR
FCA Regulated

Moneycorp

Moneycorp

Minimum Transfer
Max Transfer Fee
Margin Rate
Rate Per Single Unit
100000 GBP
gets you
FCA Regulated
£250
0
0.50%
1.109
110,917.63 EUR
FCA Regulated

HiFX

HiFX

Minimum Transfer
Max Transfer Fee
Margin Rate
Rate Per Single Unit
100000 GBP
gets you
FCA Regulated
£3000
9
1%
1.104
110,360.25 EUR
FCA Regulated

RationalFX

RationalFX

Minimum Transfer
Max Transfer Fee
Margin Rate
Rate Per Single Unit
100000 GBP
gets you
FCA Regulated
£100
0
1%
1.104
110,360.25 EUR
FCA Regulated

Excel Currencies

Excel Currencies

Minimum Transfer
Max Transfer Fee
Margin Rate
Rate Per Single Unit
5000 GBP
gets you
FCA Regulated
£1000
Free
1%
1.104
5,518.01 EUR
FCA Regulated


Quick Quote

Eiger FX

Eiger FX

Minimum Transfer
Max Transfer Fee
Margin Rate
Rate Per Single Unit
5000 GBP
gets you
FCA Regulated
£1000
Free
1%
1.104
5,518.01 EUR
FCA Regulated


Quick Quote

Lebara Money Transfer

Lebara Money Transfer

Minimum Transfer
Max Transfer Fee
Margin Rate
Rate Per Single Unit
5000 GBP
gets you
FCA Regulated
£10
0
3%
1.081
5,406.54 EUR
FCA Regulated

Manage Currency Exchange Risk - What is the foreign currency exposure?

Managing Currency Exposure

Manage Currency Risk

Manage Foreign Currency Risk

Manage Currency Exchange Risk
What is the foreign currency exposure?



One of the biggest challenges to a business involved in a foreign trade or has a foreign subsidiary is managing currency exposure. Also known as foreign exchange risk, FX risk, or currency risk, currency exposure puts a firm at the risk of making financial losses. This is due to fluctuation of the exchange rate, a changing economic environment in the foreign country, or a stronger currency becoming weaker. And unless a business adopts strategies for minimizing the risk, the company's financial record will be in the “Red.”. The following are some ways of reducing the exposure or risk:

Futures Contract
Simply known as Futures, this derivative financial instrument enables the seller and buyer to purchase or sell a product at an agreed future date. The standardized forward contract is normally used on financial instruments and commodities. The predetermined price is referred to as the forward price and protects both the seller and buyer.

Swap
A swap is also a financial derivative and involves two parties to a trade. Instead of settling payments via cash or money, the involved parties exchange cash flows, can be likened to barter trade. For instance, if the financial instrument is a bond, the parties may exchange the value of the interest accrued on the bond for the specified period. When formalizing the arrangement, the parties will agree on the future date, the rate of interest, mode of calculating and exchange.

Forward Contract
Simply known as a Forward, this instrument entails the involved parties agreeing to buy or sell a commodity or asset at a predetermined future date. It’s a type of non-standardized derivative that ignores the fluctuations that may take place after the agreement and when the exchange will happen. For instance, if the price at the start was $ 100 and they agree to settle at a future date for $120. The $120 price which is referred to as the delivery price will hold even if the market price dips to 90 or rises to $130. In either case, both the buyer and seller are protected, as they would have made their planning based on the agreed price.

Establish a Baseline Rate
Currency exposure can be managed by setting a base rate. It will define the lower as well as the upper boundary that is suitable for both parties. If the fluctuation, which is normally defined as a percentage, is within the set range, a fixed price is adopted. Adjustments will only be done when the prices go beyond the set parameters.


Final Thoughts?
There you go- 4 ways of reducing the risk that is occasioned by fluctuating currency exchange. Although all the above strategies work, their effectiveness may vary depending on the nature of trade, transaction period, fiscal and monetary policy. It’s therefore advisable to always research and adopt the best. At times, it may be beneficial to apply them selectively. A better approach is engaging a firm that specializes in managing currency exposure and related matters. Such a service will try to come up with the most feasible strategy for your company depending on the type of exposure. This allows you to focus on the core business and improving productivity, efficiency and profitability.

Different Currency Options available for Foreign Exchanges Services?

Find out the different types of foreign exchange options available to personal individuals. We have listed below a basic outline of foreign exchange services offered by non-bank providers for Individuals looking to make international payments.

Overseas Regular Transfer Plan

Individuals with monthly or quarterly payment requirements are able to set up a direct debit for their regular transfers. The rate of exchange is based on the set day of the direct debit and removes the hassle of sending payment instructions on a monthly/quarterly basis for those who have regular commitments that need to be met. Certain providers will conduct regular payments for their clients free of charge but there is usually a minimum requirement for this service.

Rate Watch Facility

Most foreign exchange providers offer a rate watch facility whereby an individual can notify their dealer of the rate they are looking for and your private dealer will watch the rate for you and notify you as soon as your specified rate of exchange is achieved.

Spot contract

A spot contract is a one-off payment usually used by clients with an immediate requirement to transfer funds. Clients are offered the rate of exchange at the time they wish to conduct their transaction. A legally binding contract is set-up with the agreed rate of exchange and as soon as the funds are received in full, the money is transferred into the beneficiary account. Most non-bank providers send the money as express payments via SWIFT (Society for Worldwide Interbank Financial Telecommunications) a highly-specialized and secure messaging service ensuring monies are deposited as quickly and as securely as possible into the required account.

Forward contract

This is the buy now, pay later option of foreign exchange. It allows you to fix an exchange rate for up to two years and protect yourself against any movement in the market rates. Clients are offered a rate of exchange to which they agree on a specified timeline (options include 6 months and 1 year). A deposit (usually 10%) is required up front and a maturity date will be set based on the agreed timeline of the client requirements upon which full settlement of funds is expected. This option is popular with clients who would like to remain within a set budget and have international payments due on set dates in the future.

Time Option

This option is similar to a forward contract but allows you the flexibility to draw down some or all of your funds up to three months prior to the maturity date you have set. If you have to make staged payments for your property or require more flexibility than a forward contract allows this could be ideal for you.

Limit order

If you've got time to hold out for a really good foreign exchange rate, individuals are able to specify the rate of exchange they would like. A contract is agreed for the provider to purchase the funds on your behalf as soon as the specified rate is achieved. The provider will then transfer the funds when the level is reached.
Types of Foreign Exchanges Services
This option is ideal for when you don't have to make an immediate payment and you have a specific budget available.

Bank Foreign Exchange Rates Comparison

Make Personal Currency Exchange Payments?

Open Personal Trading Account Need to make large international payments? Maybe One-off currency transfer? Open a free no obligation currency trading account. Once opened you can buy and sell currency online or speak to your account manager.

Business Currency Exchange Payments?

Open Business Trading Account Business currency exchange payments with tight margin rates. Not sure you are getting the best rate of exchange? Contact us today. Open a business currency trading account. Once opened trade currencies online or get currency advice from you account manager.

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