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JULY & AUGUST |www.opp.org.uk


FX Average exchange rate AUD/GBP


2.6 2.4 2.2 2.0


1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0


2012 2011 2010 2009 2008 2007 2006 Average exchange year 2012 AUD/GBP


1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8


September August July June May April Daily rate - May 2012 AUD/GBP


1.625 1.615 1.605 1.595 1.585 1.575 1.565 1.555 1.545


Exchange rate March Exchange rate 2005 2004 Avg exchange rate


AUSTRALIA | 61


Australia is a lot better than those in the UK, Europe or the US.


All this highlights two great


lessons. The fi rst is that, when you are looking at currencies, the difference between exchange rates can be enormous and, of course, this means that the value of your money (measured in your preferred currency) will also vary enormously. The second is that whether you win or lose depends entirely upon your start and end dates. Making the right decision requires research, good judgement and more than a little bit of luck. Some people say that the whole situation is so unpredictable that it is not worth worrying about yet the difference in the fi nancial performance in your investment depends so much upon the performance of the currency that it must make sense to give making a sensible choice your very best shot. Whilst nobody can prophesy what is going to happen next week or next month, it is worth having a word with your FX brokers to fi nd their feelings about the market. They won’t be able to give you advice but their knowledge might help you make a decision that could save you (or make you) an awful


“Commentators and the Big Mac index view the Aussies dollar as overvalued”


lot of money. Your FX broker will be happy to discuss your requirements with you. Of course, making the right choice about when to buy and when to sell is not your only way of saving money. If you or your clients are going to


February January


be transferring money between one currency and another you also need to be looking at getting the best possible rate at the time and reducing your transaction costs to the absolute minimum. This is another time when you should be talking to your FX broker. There still seem to be some people who have not quite realised that most major banks are generally very bad at converting currency. The rates they offer tend to be far worse than those offered by specialist FX brokers and their charges for transferring the funds tend to be higher than those of the specialist brokers. Put this to the test. Phone the bank and your broker. See just how big the difference in the overall cost is going to be.


31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1


Then you just have to hope that your judgement was right and that you have chosen the right time to buy and the right time to sell! Richard Way is editor at Smart Currency Exchange: www. smartcurrencyexchange.com


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