How can I protect myself against adverse currency fluctuations?

If you’re happy about the current exchange rate

Businesses paying overseas suppliers and private clients emigrating or buying property can take advantage of currency hedging tools such as forward contracts. If the current rate, available in the market right now, suits your needs but you only need currency at some future date then you can book a deal to lock in the current rate, for full settlement and deliver at a later date in the future.

When you book your deal, you simply need to select a delivery date up to two years in advance. You’ll probably need to place a deposit of between 5% and 10% depending on the length of a forward contract (sometimes this can be revised/removed for Business clients), but this then becomes the final 5-10% of the settlement amount, when the contract comes due.

This type of currency contract allows you to know exactly how much currency will be reserved even for a future date. It is important to note that the goal of such an operation is mainly to obtain clarity and certainty about a bought amount in the future, and not to try to “beat the market”. It can be an excellent form of currency risk management for businesses looking to manage cash flow or hedge their order book requirements, or equally for private clients aiming to budget a big purchase such as a property abroad.

If you have a desired exchange rate in mind

Other tools on CurrencyTransfer that are available for you to secure the best rate for your requirements include Rate Alerts (where you are notified of a target rate via e-mail) or Market Orders (where your deal will be automatically booked for you when your target rate becomes available). This can be very useful to set targeted levels, that are unachievable at the current time, while carrying on the day to day running of your business. These useful add-ons to our core service range help you avoid the need to check mid-market rates every second!

For all transfers on the platform, when booking a transfer, the selected Payment Provider immediately purchases the amount of desired currency, usually without a need to upload a balance or pre-fund a trade. Any future changes in the exchange rate do not affect you anymore, for better or for worse. This is great for budgeting and gives you peace of mind.

Read more about why currencies fluctuate and how it affects businesses.