Advice needed to avoid heavy currency exchange losses

Reaper

I also doubt very much it works and think you must have made a mistake. Banks have people who sit there all day moving huge sums of money around between currencies to take advantage of any tiny discrepancy in the rates, and in doing so it will move the rates to eliminate the difference.

If it were as easy as you describe to make £3500 in a couple of transactions I would give up my day job and move money round in circles all day.

rockitup

I have been using this form of multiple currency exchange rates for over 4 years now. Reason for doing so is because of where I live and travel, also for future spending plans.

The only way it will work is if you have bank accounts in the 3 currencies you wish to use AND can hold the money for weeks or months till the exchange rates come good for you (in your favour)

Have been using Citibank Global Transfer service with UK Sterling and US Dollar accounts in UK, and also a Peso account and US Dollar account in Citibank Philippines. I have traded a few times between USD/GBP and as I spend most time in Philippines I do send US Dollars over and hold them until the US Dollar/Phils Peso rate is advantageous for me.

One downside of this gamble is that to avoid some losses, you need to be looking at keeping maybe a year's worth of spending money in the currencies.(I keep about 2 years in each)

I would not attempt to do this on a frequent trading basis, way too risky... I have lost out before through impatience but overall I am well in profit.

Lastly for GBP/USD trades I use well established currency brokers, for the USD/Phils Peso the Citibank branch actually use moneychangers who bring pesos to branch and exchange for my USD. I don't even have to be there for the exchange to take place

mark49152

If you transfer between currency accounts you'll get standard bank conversion rates and you'll lose out from the spread. If it's a large enough sum, your bank may be prepared to put it out on the trading floor and get you a much better rate. Call their retail desk and ask for a quote. I've done this a couple of times with large sums. It eliminates the risk and hassle of using a third party broker and I got as close to the mid-market as I'd have got anywhere.

It's frustrating losing money on any investment, but as to when to bail out, the way I look at it is this: if I had that cash in GBP today, would I choose to invest it in EUR? If the answer is no, then it's the right time to sell the EUR.

Regards,
Mark

rockitup

mark49152 wrote: »

If you transfer between currency accounts you'll get standard bank conversion rates and you'll lose out from the spread. If it's a large enough sum, your bank may be prepared to put it out on the trading floor and get you a much better rate. Call their retail desk and ask for a quote. I've done this a couple of times with large sums. It eliminates the risk and hassle of using a third party broker and I got as close to the mid-market as I'd have got anywhere.

Regards,
Mark

Mark,

just out of interest - do you get rates on GBP/USD within 20 pips of mid-market rate (i.e. if 1.5960 then you get 1.5940). Talking about deals over £100k here. Also which bank do you use, Citibank only update rates every 30 minutes last time I asked them. That can work in your favour sometimes but I prefer to use the currency broker and give them a "target rate" to act on

RetiredInThailand

mark49152 wrote: »

If you transfer between currency accounts you'll get standard bank conversion rates and you'll lose out from the spread. If it's a large enough sum, your bank may be prepared to put it out on the trading floor and get you a much better rate. Call their retail desk and ask for a quote. I've done this a couple of times with large sums.

I always do this. Most of the retail banks I have dealt with seem to call this a "booked rate", and the rate has always been quoted to me live for an instant decision. It's generally within a few tenths of 1% of the interbank rate.

rockitup

RetiredInThailand wrote: »

I always do this. Most of the retail banks I have dealt with seem to call this a "booked rate", and the rate has always been quoted to me live for an instant decision. It's generally within a few tenths of 1% of the interbank rate.

The 20 pips I got on GBP/USD was just a touch over one tenth of 1% and leaves me nearly £280 better off on the £100k. But it all depends on your call to the dealer, helpful if you have something like a spread betting site open with relevant currency chart open so you know what they are quoting you is (excuse the pun) spot on.

The only disadvantage is the delay in moving your money around when using a broker, normally one or two days would suffice if using a CHAPS transfer method to the broker and them wiring funds back.