How Do you Get the Best Commercial Currency Exchange Rates?
There's no single easy answer to that question – and it might surprise you to know that simply going to a forex trader, as opposed to a bank, isn't necessarily the answer.
Sourcing foreign currency services
Many business people think that getting good rates is largely about buying and selling currencies on the markets and being able to strike a good deal. So, surely a big bank is capable of getting the best deals?
Others might think with some justification that a bank's size and inertia may actually work against them in the nimble-footed and highly skilled business of forex market intervention. They might turn to a specialist forex broker instead.
Which view is right?
How things work
Let's take the typical business. They probably don't care too much about what tools, techniques, technologies and strategies a forex services provider might use in order to buy and sell currency on the markets. What they do care very much about are:
In the case of large institutions like the typical bank, it's true they're making vast forex transactions every day. Yet that doesn't mean they're necessarily adopting and implementing the best market strategies in order to obtain the best rates possible.
That's because they may see forex as simply a mechanistic production process that's part of the large overall ‘machinery' of their operations. That's not likely to result in them getting the best rates and of course, their overheads may well be higher and that means their margins will need to be as well.
So, that gives a certain advantage to those specialist forex companies who do nothing else but work the markets every single day. That, coupled with their lower overheads, typically should allow them to offer some of the best currency exchange rates for business.
Yet the story doesn't stop there.
Getting the best of the best
The fact of the matter is that some specialist forex providers might, quite simply, be better at this job than others.
To really get the best out of the markets you need to have strategies that are forged out of experience and knowledge.
The experience side comes with time and continuity. Forex companies that are ‘here today and gone tomorrow' aren't going to achieve that.
Knowledge comes out of working in partnership with clients because if a forex provider understands the markets through experience and can match that to an understanding of a client's total forex requirements then the result is a client-centric exchange rate strategy.
Ultimately, thinking ahead and using sophisticated models of that type is how the very best providers will be able to generate the very best currency exchange rates around.
What does that mean for you?
Choosing a provider
You can, of course, simply make a few phone calls around to ask for the best rate you can find on a given day. That though, might be missing an opportunity and might tell you little about the rates you'll achieve, on average, going forward.
Instead, ask specialist forex providers about their approach to client-centric market strategies. If they don't know what you're talking about, well, it might not be the best sign.
Yes, an indicative one-off rate is important but ultimately what will generate the best ongoing currency exchange rates for you will be a partnership with a forex provider and the application of a strategy. Look for that above all.
Sourcing foreign currency services
Many business people think that getting good rates is largely about buying and selling currencies on the markets and being able to strike a good deal. So, surely a big bank is capable of getting the best deals?
Others might think with some justification that a bank's size and inertia may actually work against them in the nimble-footed and highly skilled business of forex market intervention. They might turn to a specialist forex broker instead.
Which view is right?
How things work
Let's take the typical business. They probably don't care too much about what tools, techniques, technologies and strategies a forex services provider might use in order to buy and sell currency on the markets. What they do care very much about are:
- the currency exchange rates they're offered;
- how much they're going to pay for the services;
- how quickly and safely they'll be able to move money around internationally.
In the case of large institutions like the typical bank, it's true they're making vast forex transactions every day. Yet that doesn't mean they're necessarily adopting and implementing the best market strategies in order to obtain the best rates possible.
That's because they may see forex as simply a mechanistic production process that's part of the large overall ‘machinery' of their operations. That's not likely to result in them getting the best rates and of course, their overheads may well be higher and that means their margins will need to be as well.
So, that gives a certain advantage to those specialist forex companies who do nothing else but work the markets every single day. That, coupled with their lower overheads, typically should allow them to offer some of the best currency exchange rates for business.
Yet the story doesn't stop there.
Getting the best of the best
The fact of the matter is that some specialist forex providers might, quite simply, be better at this job than others.
To really get the best out of the markets you need to have strategies that are forged out of experience and knowledge.
The experience side comes with time and continuity. Forex companies that are ‘here today and gone tomorrow' aren't going to achieve that.
Knowledge comes out of working in partnership with clients because if a forex provider understands the markets through experience and can match that to an understanding of a client's total forex requirements then the result is a client-centric exchange rate strategy.
Ultimately, thinking ahead and using sophisticated models of that type is how the very best providers will be able to generate the very best currency exchange rates around.
What does that mean for you?
Choosing a provider
You can, of course, simply make a few phone calls around to ask for the best rate you can find on a given day. That though, might be missing an opportunity and might tell you little about the rates you'll achieve, on average, going forward.
Instead, ask specialist forex providers about their approach to client-centric market strategies. If they don't know what you're talking about, well, it might not be the best sign.
Yes, an indicative one-off rate is important but ultimately what will generate the best ongoing currency exchange rates for you will be a partnership with a forex provider and the application of a strategy. Look for that above all.