Advice needed to avoid heavy currency exchange losses

paul_metcalf

Couldn't find a more appropriate forum to post this in. I get paid in Euros (into a UK bank currency account), sometimes only once every 4-5 months, and I have tended to leave a surplus to build waiting for a better EUR/GBP rate. I now stand to lose several thousands of £pounds when comparing the current rate to what it was when I started to be paid in Euros. Is there a safe and legal way to perhaps change my Euros into another currency, or two or even three and then back to GBP? I have checked one online Forex company and going from GBP to AUD to CHF and then to GBP gives me around £3500 more than going straight from EUR to GBP...but is it complicated and safe? I have no experience of this and I am concerned that my lack of experience could render me easy prey for an expert trader looking to make more than a reasonable fee for his/her services. Most Forex companies I have looked at online have disclaimers saying you can lose all of your money!! Thanks to anyone who can help.

slickric1234

unless your talking about tens of millions of pounds i doubt its true

I have checked one online Forex company and going from GBP to AUD to CHF and then to GBP gives me around £3500 more than going straight from EUR to GBP

the exchange rate is £1 = 1.21... euros

you may get slight differences on the commission paid when converting from one currency to another but not the % difference your talking of
also its illogical that jumping currency a to b is somehow more expensive than paying multiple commissions for currency exchange jumping to several other currencies en route

slickric1234

in my experiences with currency exchange of large sums its often cheaper to pay a flat fee than pay a percentage

i know for a fact that when i get a cheque in £ from a $ online wallet theres a flat fee charged of around £5 and i get the exact exchange rate at that moment

wheras if i sent it to a £ online wallet at the same company then withdrew (for free to uk bank account) thered be a 2% ish conversion charge

online wallet is moneybookers, hope that makes some sense to you...


id expect theres some info on the site telling you cheapest method of converting euros to £

it will usually dependon the amount being exchanged theres probably a calculator for it

http://www.moneysavingexpert.com/travel/cheap-travel-money

greenface

I cannot see that to work and think you have missed fees from somewhere . It would be difficult to price match 3 moves with fees against one. Every one wants their cut . How much roughly are we looking at to gain 3.5k from a money transfer percentage move ??

RetiredInThailand

slickric1234 wrote: »

wheras if i sent it to a £ online wallet at the same company then withdrew (for free to uk bank account) thered be a 2% ish conversion charge
online wallet is moneybookers, hope that makes some sense to you...

Moneybookers charge 2.99% weighting on currency conversions which makes them extremely expensive (more expensive than even credit cards).

The online wallet service seems to carry extra fees also.

RetiredInThailand

paul_metcalf wrote: »

I get paid in Euros (into a UK bank currency account), sometimes only once every 4-5 months, and I have tended to leave a surplus to build waiting for a better EUR/GBP rate. I now stand to lose several thousands of £pounds when comparing the current rate to what it was when I started to be paid in Euros.

The GBP has been gaining against the EUR for the last 3 years, having dropped to an absurdly low value of barely 1:1 in late 2008. I dont see this trend changing much, short of some new global catastrophe. But that said, no one knows for sure what the exchange rate will be next week or next month or next year.

Are you trying to get the best of today's rate and some future rate, or are you just hoping to fix your future rate at today's price? The former is guesswork and you will probably fail, the latter is easily done but you would lose out if the EUR increases in value over that time.

Personally I dumped many EUR at around 1.10 to the GBP and I was pleased with that, especially bearing in mind the extra interest available on GBP.

I also think that it is more important to ensure that you are paying the absolute minimum on the spread and fees when you actually do the trade, as this is the only aspect over which you have any real control. Everything else to do with FX is speculation and guesswork, and could go either way.

slickric1234

RetiredInThailand wrote: »

Moneybookers charge 2.99% weighting on currency conversions which makes them extremely expensive (more expensive than even credit cards).

The online wallet service seems to carry extra fees also.

hence

get a cheque in £ from a $ online wallet theres a flat fee charged of around £5 and i get the exact exchange rate at that moment

.....


to OP
the exchange rate is what it is
nothing you can do about it
you can take some kind of hedge out to guarauntee your getting the same rate as now for next year if you were planning to exchange a known amount

nothing you can now do about a past rate

allyou can do is look for cheapest exchange rate

or you may need to look at starting to charge whomever you work for in pounds or upping the cost /wage or whatever it is your getting paid for if your not happy with the new amount you get in pounds after exchange

RetiredInThailand

slickric1234 wrote: »

get a cheque in £ from a $ online wallet theres a flat fee charged of around £5 and i get the exact exchange rate at that moment

Their website appears to say that they apply their 2.99% weighting to all currency transactions, and that there are also extra merchant fees on top for using a wallet. Getting a GBP cheque from a USD account sounds like a currency transaction to me, so somewhere along the line I suspect that they are applying their 2.99% weighting.
This would make their charging structure similar to PayPal or Worldpay which presumably are companies that Moneybookers consider to be competitors.

If one could really get a GBP cheque from a USD account and pay no more than GBP5 total for the privilege, dont you think that everyone on the planet would be using that service? And how would Moneybookers be earning anything from it? No, there's going to be a fee hiding in there somewhere.

BritRael

paul_metcalf wrote: »

...I now stand to lose several thousands of £pounds when comparing the current rate to what it was when I started to be paid in Euros.....

Unfortunately, this is the downside of buying or selling of currency (actually, buying or selling of anything! ).

You now have two choices: you either convert and take the hit, or you sit it out and hope that it goes in your favour. Of course with the latter, over time you might gain, but equally you could lose a lot more. C'est la vie. Good luck.

Whatever you do, do not go for that multiple exchange technique that you describe. It will not work without great risk.

wriggly

The triple exchange might work, if you get lucky, but you could just as easily get unlucky and lose £3500 on the same technique.

More important is to get the best rate available. I suggest CurrencyFair http://www.currencyfair.com/ would be useful for you.

Even taking the going rate, you will save significantly. If you do not need the money to be in GBP immediately, you are in a position to offer a rate rather than accept a rate. While you have to be realistic about what rates are achievable, you may even get a better rate than the official no-commission rate (if your offer is accepted by someone willing to take a worse rate on the opposite trade).

missile

I find it hard to believe triple exchange will gain anything OP must have made a mistake.

Which UK bank currency account? OP should ask for advice from their "experts" on currency transactions? I get regular bulletins from my exchange broker.