Buy USD for bonus rates (2.12-2.13) for March-May 08

Based on reviewing the information on this post, I think this deal is worth posting as a one-off deal:
http://forums.moneysavingexpert.com/showthread.html?t=594551

Essentially, Crown Currency Exchange is offering a promotion (they say it is TODAY only, but do you trust them?) for a bonus rate for buying dollars now to redeem between March and May 08. This bonus rate works out really well based on many indicators that I'll describe here...

Their bonus rates:
March 08 - 2.12
Apr 08 - 2.125
May 08 - 2.13
http://crowncurrencyexchange.com/content/us-dollars.asp


For those who are not financially minded, you may just trust me that this is a great deal if you need USD around that time (I do not recommend doing this for investing purposes because having to exchange back to GBP will make your gains minimal. I strongly recommend for those who are needing USD anyways)

For those who want more evidence, here's why it's a good deal. Although buying for any future rate is speculation, I'll argue that this makes sense for even non-speculators who are looking for a great dollar rate (for travel, purchase, etc) around March-June 08 next year.

First, the rates CC are offering would imply a market rate of about 2% higher than the CC rates (because even the best exchangers like TEG will offer around 2% less than market rate). So, if you held on to your money you could get CC rates (from someone like TEG) in March-May 08 only if the market rates were roughly:

March 08 - 2.16
Apr 08 - 2.166
May 08 - 2.171

Now, the future markets here:
http://www2.barchart.com/mktcom.asp?code=BSTK&section=currencies
Are trading at 2.08 in March 08, and reached a high of 2.106. So, the market rates above are much more optimistic (3%) than even the future rates.

Now, the reason this is a good deal even for non-speculators who need USD around this time next year can be understood by one of these perspectives:

1. Effectively you're able to exchange for USD at the highest rates you can get today (through TEG at 2.06) and stick those dollars into a very high yield savings account. So it's like buying today and having your USD in a bank account earning 6.8+% interest (8.7% if you get 2.12 in March, 7.57% if you get 2.125 in Apr, 6.8% if you get 2.13 in May), which is great if you're going to travel (try getting that rate somewhere on a short term CD).

2. You are effectively getting high premiums on buying dollars today, without losing any penalties due to missed interest in holding your pounds. To estimate how high of a premium, take the interest rates above and subtract the interest rate you can get holding pounds in your bank. Let's say you're able to get 5% on your savings. Then, you are effectively getting the following premiums on today's market rates (and not losing interest, which is usually the downside of buying too early):
Mar - 3.7%
Apr - 2.57%
May - 1.8%


What's the downside? The only way you can go wrong with this is if the USD weakens more than 3% than the futures markets already expect. So, you can outperform the pros by 3% and still be as good off as you'd be if you'd waited. That's a pretty good margin to feel comfortable with.

Again, this is not meant for speculators. It is meant for anyone needing USD (for travel, or for a purchase) around Mar-Jun next year... An excellent deal.