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Relocation and the Currency Market: Understanding the Risks and Protecting Against Them

 

As we all know, there are many important areas to be considered in the process of relocating. From the physical removal of household goods, to settling children into new schools, there seem to be an endless number of items to check off on a relocation ‘to-do’ list. Yet as a currency specialist we continually find that the all important purchase of the employee’s local currency is often overlooked.

Whether transferring a lump sum to purchase an overseas property, or simply forwarding a US Dollar salary abroad every month, we have experienced that general corporate practice is to stay somewhat removed from this aspect of an international assignment or permanent move. Simply allowing employees to blindly use their banks to make their own decision on how they are going to move their Dollars abroad, however, can be a costly mistake!

Volatility in the currency markets is an undeniable and unavoidable daily occurrence. With a daily turnover in excess of $1.5 billion and an uncountable number of factors playing into which way the market will move, it is impossible to forecast currencies with 100% accuracy. While large corporations employ market professionals to manage billions of dollars worth of currency risk, private individuals are often left at the whim of this massive market feeling uneducated and at risk.