Watching the exchange rates like a hawk.

April 28, 2009 by
Filed under: General Budgeting, Getting to New Zealand 

This is one of the many banes of the Migrant life: when to move your hard earned cash over to your new country. The exchange rate has a huge impact on your ability to start your new life comfortably – especially if you plan to buy a house. The difference between $2.50 and $3 per £1 is significant, and gets more so when you are looking at bringing the proceeds from a UK house sale over.

When we bought our house, the rate was sitting at 2.5 – 2.6 which had the effect of meaning we had to take out about $30,000 more on our mortgage that we would need to if the rate had been nearer $3.

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We have recently sold some shares: some in £UK which are sitting in our UK bank account, and some in $US which we have as a cheque. Unfortunately, the rates for both currencies are in the floor again. On the plus side, we don’t have a deadline of a house purchase that we need the money for, so having cashed in the investments, we can afford to sit and wait a while and track the exchange rates.

I’ve learned over the past few years that it does no good to look back at your currency exchanges with a view to “if only I had waited a few more days I could have got more.” I think it is much more useful to track the rate on a daily basis when you have money to move, and work out before hand what rate you would be happy with. When the rate gets to that point – move the money and then STOP LOOKING AT THE RATES. It just does your head in otherwise.

I still use HiFX to do all my tracking and currency exchange as you just get more $$$ at the end of the day. Do remember though – you need to set up your account before you need it. It takes time to set up because they have to get ID confirmations, so don’t leave it till the last minute.

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Comments

One Comment on Watching the exchange rates like a hawk.

  1. Hubby on Tue, 28th Apr 2009 10:44 am

    2. The life lesson in all of this is that there is never an ‘optimum’ time to sell shares etc. and bring the money over to a new country.
    We bought our first house and were all ready to sell PEPs/ISAs & other shares around the middle of September 2001. And then everything tanked. We lost about UKP10,000 on paper – because we still had to sell those shares to settle on the house before the end of September. Ho hum.
    So when we did the smart thing and sold our house before emigrating – we waited for the rate to improve from the $2.7 it was at when we arrived.. And waited, and waited, and then needed to settle on a house again.

    So what to do next time? Sell the shares when you are comfortable doing so, and have the cash ready in advance. Because having all these other investments for a ‘rainy day’ is not much use if you miss a mortgage payment and the bank comes knocking. Being forced to sell, possibly in a short space of time, to keep the bank off your back isn’t going to be fun.

    And it is fun at the moment, selling the shares for a decent price, watching the exchange rates blip up and down. Who knew currency transfers could all be so exciting?

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