Case Studies
Spot Contract
DS Textiles recently purchased a new piece of equipment for their factory in Prague. The cost of the equipment came to €250,000. DS Textiles went to the bank and were offered an exchange of 1.09.
By coming to Currencies 4 You, DS Textiles were able to gain a more favourable exchange rate of 1.1350 saving a total of £9,093.
Forward Contract
Jones Pharmaceuticals ordered a container of medium sized bottles from one of their suppliers in Canada. The total cost amounted to 500,000CAD, but the order was not due to arrive for another 2 months. Jones Pharmaceuticals understood that the CAD rate was at its best in months and decided to enter into a forward contract to buy the 500,000CAD at an exchange rate of 1.63.
When it reached the final date, the exchange rate had actually dipped substantially to 1.5968, but luckily, Jones Pharmaceuticals had fixed their rate at 1.63, meaning the cost of the container was fixed, which saved a total of £6,378.
Regular Payments
Alpiler Ltd makes regular monthly payments to Germany in order to maintain their offices. By going through their bank to make the transfers, the found they were receiving poor exchange rates, and had to wait up to 7 days for the money to be received
Alpiler Ltd now uses Currencies 4 You, who made the process simple. By setting up a standing order, Alpiler Ltd sends their funds to Currencies 4 You on a monthly basis. From here, Currencies 4 You, exchanges the sterling to Euros, the sends the Euros straight to their account in Germany, all on the same day. On top of this, there is a saving of £7,800 yearly.
Stop Loss Order
Styling Imports are importing a new modified vehicle from America. The car is costing $35,000. The current rate for USD is 1.55. Styling Imports understand that if they were to take this rate, it would cost them £22,580.64. Styling Imports have reason to believe that the exchange rate will go up over the next couple of days. They want to limit the cost they will have to pay to £22,700, while have the opportunity to pay substantially less if the rate moves in their favour.
Styling Imports instructed Currencies 4 You to initiate a stop loss to buy $35,000 at an exchange rate of 1.5418, so the maximum they will pay is £22,700. If they are right about the rate moving up, then the Car will work out cheaper than expected.
Limit Order
Frozen Imports, one of the leading food importers in London, are looking to sending $500,000 to China to pay for their items. The dollar was trading at 1.55, and they were in no hurry to make the transfer, so they thought they would hold old for 1.58.
Frozen Imports the approached Currencies 4 You. With C4U, they initiated a Limit order to purchase the $500,000 when the exchange rate hits 1.58. So if the rate did eventually hit 1.58, then they would have hit what they desired, and would have been book straight away.
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