Cashing foreign cheque from USD

MCrookie

I've received a foreign cheque for a large amount so it makes quite a difference to the amount I get if the exchange rate changes only slightly. I've read some of the posts and it seems if I put this in my bank with NatWest it would take weeks to clear so I would be taking quite a chance so near to the American elections. I phoned them but the non-existent advice was less than useless. Is there a better way to cash this where I would know what rate I was getting upfront?

jonesMUFCforever

Contact your bank again and ask to speak to their forex dealers - explain that you have a USD cheque and ask them to explain Forward Contracts with you.
You may well have to wait 6 weeks for the funds but the FC will determine the exchange rate.

I don't know what a large amount is though - you tell us.

John_

You can pay it into a USD account in the UK, and at the same time sell USD on a derivatives platform. The combination of the two locks in today’s rate.

jerrydan

Contact your BANK and explain to their forex dealer

John_

jonesMUFCforever said:

Contact your bank again and ask to speak to their forex dealers - explain that you have a USD cheque and ask them to explain Forward Contracts with you.
You may well have to wait 6 weeks for the funds but the FC will determine the exchange rate.
I don't know what a large amount is though - you tell us.

You aren’t getting through to the commercial foreign exchange desk unless the amount is in the millions.

Ballard

I agree that speaking to an fx dealer won’t happen unless the amount is significant. If it is a large amount it won’t be possible to firm up on a rate unless a specific date is known when the funds will be cleared. Forward FX rates are derived from money market rates so will change depending on the date.

One other point worth noting is that unless you have a decent amount already with the bank or an excellent relationship they may well be unlikely to enter into a forward fx with you anyway because the cheque could bounce and they’d be left with an open position. 

jonesMUFCforever

Ballard said:

I agree that speaking to an fx dealer won’t happen unless the amount is significant. If it is a large amount it won’t be possible to firm up on a rate unless a specific date is known when the funds will be cleared. Forward FX rates are derived from money market rates so will change depending on the date.

One other point worth noting is that unless you have a decent amount already with the bank or an excellent relationship they may well be unlikely to enter into a forward fx with you anyway because the cheque could bounce and they’d be left with an open position. 

The bank would not be responsible for any loss -  the customer is - this is why the OP understands what a FC is.

Ballard

jonesMUFCforever said:

Ballard said:

I agree that speaking to an fx dealer won’t happen unless the amount is significant. If it is a large amount it won’t be possible to firm up on a rate unless a specific date is known when the funds will be cleared. Forward FX rates are derived from money market rates so will change depending on the date.

One other point worth noting is that unless you have a decent amount already with the bank or an excellent relationship they may well be unlikely to enter into a forward fx with you anyway because the cheque could bounce and they’d be left with an open position. 

The bank would not be responsible for any loss -  the customer is - this is why the OP understands what a FC is.

It’s true that the customer would be responsible for the loss but if the check were to bounce and the customer had no funds in their account then the bank would be left with the position and no easy way to recoup potential losses.

born_again

MCrookie said:

I've received a foreign cheque for a large amount so it makes quite a difference to the amount I get if the exchange rate changes only slightly. I've read some of the posts and it seems if I put this in my bank with NatWest it would take weeks to clear so I would be taking quite a chance so near to the American elections. I phoned them but the non-existent advice was less than useless. Is there a better way to cash this where I would know what rate I was getting upfront?

US stimulus cheque by any chance?