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Transferring Money Between Currencies

There are two different reasons for participating in foreign currency exchange. The first is as a speculative investment strategy. If you have reason to believe that one currency will appreciate against another you can sell the currency you think will decrease and buy the currency that you believe will appreciate.  It is even possible to borrow the currency that you expect to go down and then convert it to the currency you expect to go up.

But the other reason for exchanging currencies is more common (and less risky). And that is…

Currency ExchangeIf you have a regular need to transfer money into different currencies either for business or because you are traveling to another country. There are several ways to exchange currencies many of us still go the high street bank or the post office, or even airport / ferry / travel agent desks etc., to change money in person. But there are various dedicated and mainly web-based money transfer specialists who specialize in making their international exchange rates as competitive as possible – which is why it’s so strange that so many people still use the old ways.

The beauty of the online services is that they’re completely secure and can be accessed from any computer with an internet connection wherever you may be. Once your accounts are set up, you can get a live quote with ease 24/7, and buy or sell if you like the price you’ve been quoted.

This is great news for those of us who like to take advantage of anomalous currency fluctuations through the year. So if you’re planning a trip to the USA next year, for example, and the pound is a little stronger against the dollar than usual, then you can buy a few dollars ahead of time, safe in the knowledge that you’ve locked in a good deal. You don’t even need to have sufficient money in the account at the time you make the transaction – though of course you will have to honor the transaction regardless of how the market moves thereafter.

The exchange you’re quoted will depend on the amount of money you’re transferring (the more you change, the better the rate) as well as the currencies you’re buying or selling of course and, perhaps most crucially, the exchange rate at the time; timing is everything as they say.

If you’re transferring amounts which are significant to you – then it’s always worth playing one off against another to see if the competitors will improve on each other’s quotes. Also be aware that Governments do not like anonymous transactions. Recently, in a high profile case, several governments got together to shut down  a digital currency exchange.   But in this case they had created their own currency to compete with government sponsored currencies and as proof of their criminal intent to facilitate “money laundering” the government charged that they were allowing anonymous money transfers.  Which in the minds of bureaucrats  is de facto proof of criminal intent. So be cautious when opening any account to be sure that they are complying with government regulations and unfortunately we must beware of any money organization that allows anonymous money transfers.

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Image courtesy of Stuart Miles / FreeDigitalPhotos.net