TRUTH is that if I had the perfect answer, I’d be writing this from my yacht in the Bahamas SURROUNDED by bikini-clad senoritas, sipping cocktails with little umbrellas in them. I assure you that is not the case and I am in fact in an office in the West End drinking coffee… instant coffee.
No one really knows what the rates are going to do. We can speculate and to a degree predict what will happen, but it’s impossible to say where the currencies will be in a year’s time or if a Friday will be a better than a Thursday or when a natural disaster will next hit. It’s true the markets see a lot of activity on Fridays, but that’s more to do with data being released than anything else. The key to knowing money comes down to urgency, reason and understanding the markets.
So when should you transfer money?
No two individuals’ circumstances are the same. The key is to have a good relationship with a forex broker you trust so the broker understands your needs.
If you’re paying off a mortgage it’s probably best to send X amount each month so you benefit from Pound-cost-averaging (investing equal monetary amounts regularly and periodically over specific time periods). By splitting your large transfer into several amounts, you also leverage yourself against any currency risk; the risk that the rate will go up or down.
Again, if you don’t really have a need for the funds in the foreign currency, it’s best to speak to a financial advisor to see if you cannot invest the funds in an ISA, for example, while you continue saving.
One thing to remember is you’re not marrying the currency; try not to get emotional about it — rates do go up and down and unexpected events will always influence them.
As Kenny Rogers said, “you have to know when to hold ‘em, know when to fold ‘em…”
Please get in touch with us at Sable FX if you have any specific questions.
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