HiFX knows buying/selling large amounts of currency can be very daunting. It is important to understand that if you are buying abroad, you expose yourself to “currency risk”. Currency movements can make a big difference to the final amount you end up paying for your property because of the time it takes to complete the purchase. Subsequently, this could cost you thousands of dollars.
For example, if you purchased a property in Panama for $200,000 in early November 2006 (when the USD/CAD exchange rate was 1.12 it would have cost you $224,140 CAD. Had you neglected to fix the exchange rate at the time, that same property would have cost $237,040 CAD by January 2007 (based on a 1.18 rate), an increase of $12,900 or 5.3% over 2 months. That’s a lot of money.
If all the funds are available for purchase, you may prefer to fix an exchange rate to secure your costs. One option is the “spot” trade: buy all the currency now and your HiFX dealer will hold it on your behalf and transfer the funds abroad when you need them.
However, if you currently do not have all the funds available for a spot contract but are worried that future exchange rates might increase your costs, you can be safe and buy a “forward” contract. Initially, you only need to have access to 10% of the funds. It is simply a mechanism to “buy now, pay later”, minimizing currency risk.
Once your property is purchased you may still need to transfer money on a regular basis for mortgage payments, maintenance costs, or living expenses. Consider HiFX’s Regular Payments Abroad (RPA) service: fix an exchange rate for up to 2 years, establish a standing order with your bank, and send the currency abroad for no charge. Complete peace of mind.
To find out more about the currency services HiFX provides, simply contact Joshua Hritz on (415) 678 -2770 or e-mail joshua.hritz@hifx.com or visit www.hifx.com
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