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When is the Best Time to Send an International Payment?

When you're sending a large international payment, timing can make a big difference in how much you pay. Here's how to time things right so you get more for your money on the currency exchange. If you need to send money abroad for a one-time transaction, say for purchasing property abroad, the exchange rate can make all the difference in terms of what you pay for your new property. With economic uncertainty around the world, not to mention the volatility of the British pound this summer, timing your international payment is key.

What's Happening to the Pound?

According to the Wall Street Journal, the British Pound Volatility Index was at its highest in eight years this summer. The CBOE British Pound Volatility Index measures volatility, or swings in value, of sterling against the U.S. dollar. That was in June, right before the Brexit vote, where currency value swings symbolized British uncertainty over how the vote would go. The sterling was particularly sensitive to Brexit polling data this past June, which made wild swings for customers in currency exchange rates. After the General Election, the British pound volatility continued to swing high, prompting some to compare it to the notorious volatility of Bitcoin. Now, however, the Pound seems to be making a comeback, or so some think. Optimistics are called "Pound bulls", after their hopes for a bull market. As of September 1, the Pound rose against the dollar, hitting its highest in four weeks. Confidence is still low, and sterling is still performing badly, but there is hope it will become stronger in the near future.

What This Means for Anyone About to Send Money Abroad

What volatility means for anyone making a large international payment is this: on any given day, your transaction could end up costing you far more than it might the very next day, simply due to wild swings in the rate of currency exchange. Lucky timing could mean the difference between having enough left over for a luxury vacation, in fact. Sounds dramatic, but with large payments, the exchange rate is a major concern. You'll be glad to know that, fortunately, you aren't completely at the mercy of all this volatility. While there's nothing you can do to alter the currency exchange rate of the day, you can time things so as to try and minimize the effects of volatility. Here's how that works.

How to Time Things Right With the Currency Markets

First, let's look at what typically happens when you need to make a large international payment though a bank. You walk into your bank to ask about what you can do about the wild swings of the pound's value, so as to minimize loss when you make your payment. Most likely, the answer will be simply what their rate is on that day. Every day, banks change their exchange rate to reflect the market price. They will simply send your transfer when you request it be made, regardless of what the pound is doing that day. They have neither the resources nor the inclination to monitor the exchange rates for their customers in order to time the transfers for optimal return.

Here's How it Works at ACE-FX

If banks can't help you time things right with the currency markets, who will? Currency specialists like ACE-FX offer multiple products to help customers get the best exchange rate possible. First of all, we have dedicated account managers who are there to answer your questions about making a transfer abroad. Secondly, they can give expert advice about the best exchange rates and how you can save money. We offer international money transfers through Moneycorp, a leader in the industry. The personal attention you'll receive with ACE-FX will ensure that you feel confident about your transfer and that you'll be getting the best rate. You'll typically save 1% to 4% over your bank, and we serve over 100 countries.

If You're a Business, We Offer Currency Exchange Protection

There are three ways businesses can save on exchange rates:
  1. Spot Contracts. You may 'fix' an exchange rate for up to 10 days in the future, as a hedge against volatility that's expected in the short term.
  2. Forward Contracts. This is a long-term contract: up to 24 months. This protects your business against volatility by locking in a good rate. You just pay a deposit, then make your transfer within the next 24 months.
  3. Contract Options. This allows you to opt out of your contact in favour of the spot market.
At ACE-FX, we're always looking for ways to improve the customer experience. Call us any time and we can tell you more about making international payments with us.  

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