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Currency Exchange
Updated January 2012
Currency Specialists
Buying Australian Dollars?
With OzForex you will get a better deal. Our highly efficient dealing platform and small margins allow us to offer you excellent exchange rates so your money goes further.OzForex offers:
- Excellent rates of foreign exchange - saving you money every time.
- No transfer fees - on amounts greater than £5000. For smaller amounts, the fee is only £7.
- No minimum transfer amount
- Security for your money - OzForex holds an Australian Financial Services Licence, offering a safe and regulated means of transferring your money. The OzForex group is one of the world’s leading online foreign exchange providers and a strategic investment of Macquarie, the Carlyle Group and Accel Partners.
- Forward contracts & limit orders - helping you manage risk and the volatility of the currency markets.
- Accessible 24-hours a day, 7 days a week - you can deal with your personal Foreign Exchange Dealer on the phone or via our online trading system - it's your choice!
- Honesty in Foreign Exchange - at OzForex our margins are small & transparent. We show both our exchange rate and the interbank rate so our clients can see exactly how competitive our rate is.
- Currency Information - We have developed a range of tools to help you understand and track the currency markets including charts, daily or weekly market commentary, and rate alerts - just ask your Dealer.
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IMPORTANT: This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. OzForex Pty Ltd makes no recommendations as to the merits of any financial product referred to in its website, emails or its related websites. These rates are indicative only and relate to professional market prices. They are updated daily but OzForex does not guarantee the accuracy of the rate or calculations. |
Currency Charts
Provided by our partners OzForex (www.ozforex.com.au).
Foreign Exchange Basics
This feature article provided by our partners OzForex (www.ozforex.com.au) June 2010
When setting up life in a new country there are many factors to consider. One factor which people seldom put a lot of thought into is how to maximise on the transfer of their funds abroad.
There are a number of variables in this process and it is important to consider all of the below:
Timing
Is it a good time to transact? Looking at the graph below is it easy to see that there is a significant difference to your back pocket trading from the top of the peak to where we are currently. This could mean the difference of thousands of dollars. It is worth chatting to the experts about when is a good time to transact and what is a realistic figure to aim for.
Hedging tools
Similarly, it is important to have access to hedging tools such as limit orders and forward exchange contracts which can be used to manage the volatility of the foreign exchange markets and can make an enormous difference to your bottom line.
Margin
Very often, providers will not disclose what margin they are taking from you – they may only disclose the cost of the telegraphic transfer fee. In order to calculate the margin yourself, compare the rate you have been offered with the interbank rate (i.e. the wholesale rate which you can see at the Spot Rates page on the OzForex website www.ozforex.com.au ). Make sure that your provider will stick to this margin if you choose to trade right there and then. Often margins are quoted tightly and then not available upon trading.
Fees
Again, fees are not always revealed unless you ask the question. Make sure you ask about transfer fees, commissions as well as receiving and intermediary bank fees. These can all add up and make what first seemed like a competitive rate not very competitive at all. This is particularly important if you are transferring funds on a regular basis for mortgage repayments or any other ongoing commitments – the difference could be as much as $100 per payment.
Security of funds
If you are using a non bank provider, do they hold an Australian (or other relevant) Financial Services License?
To speak to one of the OzForex accredited dealers about your foreign exchange requirements call 1300 300 424 in Australia (0845 686 1950 in the UK; 1800 680 0750 in Canada or 0800 161 868 in NZ) or register online.
Registering with OzForex is FREE and you can view our live dealing rates immediately.
As a member of Aussiemove you will receive your first two transactions fee FREE. www.ozforex.com.au
Forward Contracts etc.
If you've never made a large foreign currency transaction, you may be confused by some of the terms used and their significance to you. This section aims to give you an introduction to some of these terms.Spot contract
A spot contract is also known as a "buy now, pay now" option and is where you fix the rate today and pay for the currency straight away. It is a very simple and fast way of buying your currency, and means you are protected from any adverse movements in the market.Forward Contract
Also know as a Also know as a "buy now, pay later" option, the forward contract allows you to fix a rate of exchange today for delivery in the future, but only pay a 10% deposit. The forward date can then be set for anything up to 2 years in the future, thus giving you complete peace of mind knowing how many dollars you will receive.For example, you could fix into today’s rate for £100,000, but should most of the equity be tied up (e.g. In your house) then you can secure this rate with just a £10,000 deposit, and pay the remaining £90,000 when the house sale completes.
Market Order or Target Rate
If you think the exchange rate will rise, then you can set a level at which you want to buy your dollars. If and when this level is hit, the currency is bought on your behalf and the currency dealer will contact you. It is worth noting that is does carry an element of risk because if the target rate is not reached, the currency is simply not bought for you and you leave yourself at risk to the market moving against you.Bid/Ask Rates and Spread
Just like any traded commodity, there is a bid and an ask rate for a currency. The bid rate is the rate quoted when you want to buy the currency, the ask rate is for selling.The spread is the difference between the bid and ask rates. Generally, the spread is smallest for inter-bank and large value transactions and greatest for tourist (eg. holiday cash) transactions.
Inter-bank Rate
The rates you normally see quoted in the newspaper or on currency websites are the inter-bank bid/ask rates, which are the rates used by banks and other financial institutions when buying/selling very large amounts of currency.When trading smaller amounts, you can expect to receive a rate below the inter-bank rate. The larger the amount, the closer to the inter-bank rate you may expect to achieve.
Bank or Broker?
Obviously your aim is to get the maximum amount of Australian dollars you can. The biggest factor in that transaction is the prevailing exchange rate and you have no control over that.A second factor is whether you can arrange a forward contract, if this is your strategy, with a particular company or bank.
A third factor is how close to the inter-bank rate you can achieve. Each organisation dealing in foreign exchange will determine their own spreads. The difference between, say 2.15 and 2.18 doesn't mean much when you're changing £500 to go on holiday, but if your changing £100,000, it's serious money.
Another factor is how much it costs to send the funds to your Australian bank account. This will vary between organisations.
What are the Options?
Your main options are to use your bank in your home country, the Australian bank you open your account with or a company that specialises in foreign exchange.You can obtain quotes from more than one organisation, for the amount you intend to transfer, then compare the rates, level of service and other costs. Obviously you need to get quotes at pretty much the same time, so they're based on the same inter-bank rate.
Disclaimer
Information on this website is intended to give the reader an overview of many aspects of life in Australia, such as healthcare, real estate, tax, superannuation etc.
While we at Aussiemove.com have performed a large amount of research on each subject area, we do not claim to be experts in those fields and we recommend that migrants discuss their requirements with companies specialising in those fields before making purchases, investments or other decisions concerning their move.
The content of this website is general in nature - no specific advice is intended.
We provide links to other companies as a service to our readers. We have taken reasonable care to ensure that each linked website does not contain offensive or inappropriate material. However, we are not responsible for the accuracy of any of the material in any linked website, or the advice that may be contained therein.