Aussie softens again having failed to break resistance

Posted by OFX

  Australian Dollar

Having opened a shade above 74c at the start of early Asian session, the Australian Dollar came under selling pressure as Monday kicked into full swing. The AUD/USD touched a low of 0.7373 against the US Dollar and with little local data the Aussie remained centred on Chinese currency developments. China’s central bank injected 502 billion Yuan to financial instructions via its one-year medium-term lending facility (MLF) with rates unchanged, a move which was totally unexpected by the market.

Weighing further on the Aussie was U.S data released by the Federal Reserve Bank of Chicago. The National Activity Index boosted by the upbeat production-related indicators jumped up to 0.43 in June from -0.45 in May a move that pushed the US Dollar index higher. On the commodity front, oil, gold and base metal prices were all a tad lower.

 

The economic calendar is light ahead of tomorrow’s CPI. We see immediate support at 0.7345 and resistance can be seen at 0.7400

  New Zealand Dollar

AUD / NZD Expected Range: 1.0830 – 1.0970

The New Zealand Dollar gave up gains enjoyed into last weeks close through trade on Monday as deeper depreciations in the CNY weighed on the unit. Having touched intraday highs at 0.6825 the NZD gapped lower and fell back through 0.68 to touch 0.6775 and open buying just 0.6784 U. S Cents.

Despite reasonable and improving domestic economic performance New Zealand’s exposure to a global slowdown, in particular the Chinese value chain has driven the Kiwi to record short positions and been a primary catalyst for the renewed downside. However recent strength across commodity prices has helped firm support on moves toward 12 month low and 0.67.

Attentions remain with ongoing geo-political developments as the primary driver through the short term with macroeconomic focus on the Bank of Japan and reports the monetary policy framework may shift come next weeks policy meeting. The impact on global bond markets was significant and may force a short term correction in direction.

  British Pound

GBP / AUD Expected Range: 1.7620 – 1.7880

The Great British Pound is slightly weaker this morning when valued against its US counterpart reaching session high yesterday of 1.3157 before settling around 1.3100 on the back of and another round of negative Brexit headlines. Investors have been selling-off their Sterling positions ever since former Foreign Secretary Boris Johnson and Chief Brexit negotiator David Davis resigned from their relative Government positions. Looking ahead today the Pound Sterling will most likely follow any continued Brexit politics.

 

On the data front today in the UK and its fairly light on the macroeconomic calendar with the only release CBI (Confederation of British Industry) Industrial Order Expectations. Data from the CBI survey is closely watched by the market and often gives a timely indication of economic trends. The survey forecast is to come out at 10 from 13 previously.

 

From a technical perspective, the GBP/USD pair is currently trading at 1. 1.3080. We continue to expect support to hold on moves approaching 1.3100 while now any upward push will likely meet resistance around 1.3155.

  United States Dollar

AUD / USD Expected Range: 0.7320 – 0.7430

The United States Dollar shook off President Trumps Friday tweets in overnight trading to begin its recovery against a number of the major currencies. The US Dollar Index is up 0.28% this morning, as demand for the greenback returned to the market.

 

The Catalyst for the reversal of fortunes, albeit small, was the upbeat data from the Federal Reserve Bank of Chicago which showed the National Activity Index rise to 0.43 in June. However, the good news was significantly counter-balanced by a 0.6% reduction in existing home sales. The good start continued for the Greenback however, as commodity currencies began to depreciate against the USD when China announced it would inject $74b of liquidity into the market, further easing their accommodative monetary policy. The CNY immediately plunged 0.4% which contributed to declines across the board for commodity currencies. The Greenback strengthened further again, as rumours of tweaks at the Bank of Japan to monetary policy reverberated around the market, driving global bond yields higher and increasing demand for the US Dollar. Overall, it was a perfect storm for the United States as sentiment dictated direction for much of the day.

 

Moving into Tuesday, the United States turns to a fairly quiet domestic docket with only Markits Manufacturing and Services PMI figures and Richmond Fed’s Manufacturing Index to excite markets.

  Euro

AUD / EUR Expected Range: 0.6300 – 0.6380

The Euro was not able to continue with the strength seen on the Asian session, which saw EURUSD reaching a high of 1.1750, and closed 0.30% weaker at 1.1692.

The USD started the week weaker versus all major currencies following a report that ignited a spike in Japanese yields and the JPY. But traders turned their attention onto the US earning season and expectations of a strong GDP number this week. The JPY turned around, US yields spiked and the USD followed.

Support for the EURUSD is sitting at the June 5 low of 1.1653 while 1.1750 should continue to act as resistance.
This week will bring PMI numbers plus the ECB meeting.

  Canadian Dollar

AUD / CAD Expected Range: 0.9680 – 0.9780

The loonie couldn’t hold onto the Asian session gains, which saw the USDCAD trade as low as 1.3115, and ended up the session 0.20% weaker versus the USD at 1.3172.

The pickup in US yields and broad USD strength saw the loonie reversing gains and the drop in WTI prices further accentuated the correction.

USDCAD continued to trade in the new 1.31/1.32 range, levels that will be acting as support/resistance in the short-term.

Posted by OFX

The Canadian Dollar’s Value to be Determined by the Broader Market Sentiment.

OFX Daily Market News

Posted by OFX

  Canadian Dollar

The loonie couldn’t hold onto the Asian session gains, which saw the USDCAD trade as low as 1.3115, and ended up the session 0.20% weaker versus the USD at 1.3172.

The pickup in US yields and broad USD strength saw the loonie reversing gains, and the drop in WTI prices further accentuated the correction.

USDCAD continued to trade it trend channel of 1.3115 /1.3189 range, levels that will be acting as support/resistance in the short-term. There are no Canadian economic releases this week for Canada; therefore, the loonie will trade on the broader market participant sentiment.

 

 

 

  United States Dollar

USD / CAD Expected Range: 1.3115 – 1.3189

The United States Dollar shook off President Trump’s Friday tweets in overnight trading to begin its recovery against a number of the major currencies. The US Dollar Index is up 0.28% this morning, as demand for the greenback returned to the market

The Catalyst for the reversal of fortunes, albeit small, was the upbeat data from the Federal Reserve Bank of Chicago which showed the National Activity Index rose to 0.43 in June. However, the good news was significantly counter-balanced by a 0.6% reduction in existing home sales. The excellent start continued for the Greenback, however, as commodity currencies began to depreciate against the USD when China announced it would inject $74b of liquidity into the market, further easing their accommodative monetary policy. The CNY immediately plunged 0.4% which contributed to declines across the board for commodity currencies. The Greenback strengthened further again, as rumors of tweaks at the Bank of Japan to monetary policy reverberated around the market, driving global bond yields higher and increasing demand for the US Dollar. Overall, it was a perfect storm for the United States as sentiment dictated direction for much of the day.

Moving into Tuesday morning a relatively quiet domestic docket for economic releases. Markits Manufacturing and Services PMI figures will be released at 9:45. Followed by the Richmond Fed’s Manufacturing Index at 10 am.

 

 

 

  Euro

CAD / EUR Expected Range: 0.6487 – 0.6504

The monthly tranche of PMIs has been released this morning with a mixed bag of results is shown. The Eurozone’s purple patch of expansion seen late last year has been replaced with a more modest pace of output of late highlighted by the reduction in PMI figures. German manufacturing for July printed 57.3 beating expectations but some way off the series of >60 readings we saw either side of Christmas. Eurozone Manufacturing as a whole came in at 55.1 ahead of the 54.7 forecast. The EZ Services number printed 54.4 slightly worse than the 55.0 predicted. This week’s main event from the euro is the ECB Interest Rate decision due on Thursday. No change in policy is all but guaranteed however the market’s focus is the timeframe of when the ECB will look to tighten policy. Rates are currently predicted to be raised in the H2 2019, so any hints that it will be sooner will likely see a euro rally. GBP/EUR is at 1.1220.

 

 

 

  British Pound

CAD / GBP Expected Range: 0.5784 – 0.5801

After the tumultuous Trump tweets, we saw on Friday, and over the weekend it was a relatively quiet start to the week in the FX space from the pound’s perspective. GBP/USD has fallen back towards 1.31 over the past 24 hours as the dollar retraces some of its Trump driven losses. There was no top-tier UK data yesterday however one piece of news to catch sterling holder’s eyes was at a forum in Liverpool where Bank of England Deputy Governor, Ben Broadbent stated he hadn’t decided on whether to vote for a rate hike next week. Broadbent is seen as a dove amongst the Monetary Policy Committee, so it could be seen as a hawkish signal that he’s contemplating voting to raise rates. Chances of a hike are around 80% currently. GBP/USD hovers around 1.31 ahead of another quiet day for sterling.

 

 

 

  Australian Dollar

CAD / AUD Expected Range: 1.0252– 1.0300

Having opened a shade above 74c at the start of the Asian session, the Australian Dollar came under selling pressure as Monday kicked into full swing. The AUD/USD touched a low of 0.7373 against the US Dollar, and with little local data, the Aussie remained centered on Chinese currency developments. China’s central bank injected 502 billion Yuan to financial instructions via its one-year medium-term lending facility (MLF) with rates unchanged, a move which was unexpected by the market.

Weighing further on the Aussie was U.S data released by the Federal Reserve Bank of Chicago. The National Activity Index boosted by the upbeat production-related indicators jumped up to 0.43 in June from -0.45 in May a move that pushed the US Dollar index higher. On the commodity front, oil, gold and base metal prices were all a tad lower.

The economic calendar is light ahead of tomorrow’s CPI. We see immediate support at 0.7345 and resistance can be seen at 0.7421

 

 

 

  New Zealand Dollar

CAD / NZD Expected Range: 1.1159 – 1.1204

The New Zealand Dollar gave up gains enjoyed into last weeks close through trade on Monday as deeper depreciations in the CNY weighed on the unit. Having touched intraday highs at 0.6825, the NZD gapped lower and fell back through 0.68 to reach 0.6775 and open buying just 0.6784 U. S Cents.

Despite reasonable and improving domestic economic performance New Zealand’s exposure to a global slowdown, in particular, the Chinese value chain has driven the Kiwi to record short positions and been a primary catalyst for the renewed downside. However recent strength across commodity prices has helped firm support on moves toward 12 months low and 0.67.

Attentions remain with ongoing geopolitical developments as the primary driver through the short term with the macroeconomic focus on the Bank of Japan and reports the monetary policy framework may shift come next week’s policy meeting. The impact on global bond markets was significant and may force a short-term correction in direction.

 

 

 

Posted by OFX

Canadian Dollar Holds Friday’s Gains.

OFX Daily Market News

Posted by OFX

  Canadian Dollar

Great close to the week for the loonie, trading back below 1.3150, more than 1% stronger versus the greenback to USDCAD 1.3130.

It wasn’t only the broad USD weakness following Trump’s comments that helped the CAD but also the positive performance of commodities and Canadian yields. Retail sales came stronger for May at 2% (versus 1% expected) while CPI for June came at 2.5% (versus 2.3% expected), both supportive of higher interest rates and thus a stronger CAD.

This week will bring wholesale trade sales, possibly a good indicator of how the trade war drama is affecting the sector. From a technical perspective, we’ll have to see if the loonie is able to break below 1.31 or if we will again start trading within the 1.31/1.32 range in the short-term.

 

 

 

  United States Dollar

USD / CAD Expected Range: 1.3115-1.3161

President Donald Trump was again the catalyst for volatility in the market, single-handedly forcing the US Dollar Index (DXY) lower. His comments and tweets were vast and varied in their targets, ranging from foreign rivals, allies, and even domestic institutions. Ultimately the DXY Dollar Index shed 0.7% to open this morning at 94.48, extending its’ losses to 1.25% lower than the year to date high of 95.65.

The barrage began initially with President Trump again accusing China and the EU of manipulating their currency and interest rates lower, further aggravating tenuous global relations. The Tweet continued to also include the independent Federal Reserve, with Trump highlighting their role in the stronger Greenback and noting “…the U.S. is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge.” The market took the news poorly for the USD and immediately began to fall against its counterparts. Punters can clearly see that Trump prefers a lower US Dollar but the Federal Reserve is an independent body with their mandate and is unlikely to be swayed from their tightening plans. Nevertheless, the market entered another period of volatility. Closing out a busy Friday for the President was his comments to CNBC outlining his willingness to “go to 500”, in reference to the on-going trade war with China.

Attention this morning turns to existing home sales in the US released at 10 am. Later this week and the most significant economic data coming from the US on Friday with annualized GDP for Q2 expected at 4%.

 

 

 

  Euro

CAD / EUR Expected Range: 0.6481-0.6506

As we near August we get closer to what is typically a quiet period for the Eurozone as traders and business’ take time off and head to the beach for a break. This week’s main event, which is likely to be a non-event, is the European Central Bank interest rate decision with little expected from ECB head, Mario Draghi. Last month we saw confirmation of the end of QE and its unlikely we will hear any change in tone re: timing of future rate hikes. Tomorrow morning sees the monthly PMI readings from around the bloc with little change in the main gauges predicted as a general slowdown in output permeates the EZ. GBP/EUR trades at 1.1210.

 

 

 

  British Pound

CAD / GBP Expected Range: 0.5783-0.5813

GBP/USD retook the 1.31 handle on Friday afternoon after looking in danger of breaking below 1.2950 a day earlier. Sterling has been under pressure of late as political concerns re: Brexit weigh on the currency with political in-fighting and high profile resignations in PM, Theresa May’s cabinet. Some of these losses were reversed on Friday as US President, Donald Trump again rattled markets with a series of tweets over trade and currency. The one that weakened the dollar leading to sterling’s recovery stated: “China, the European Union, and others have been manipulating their currencies and interest rates lower, which the US is raising rates while the dollar gets stronger and stronger with each passing day – taking away our competitive edge. As usual, not a level playing field…” he went on “…The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates – Really?” The tweets saw the dollar sold off across the board coming to sterling’s aid when it looked like cable could get stuck below the 1.30 handle. There is little data of note from the UK this week however next week’s schedule is packed, including what will likely see only the second interest rate hike from the Bank of England since the financial crisis. GBP/USD sits at 1.3145.

 

 

 

  Australian Dollar

CAD / AUD Expected Range: 1.0250-1.0296

On Friday, the Australian Dollar suffered a massive sell-off during the Asian session sparked by the People Bank of China’s decision to devalue the Yuan by the most since 2016. The PBOC raised the yuan reference rate by 605 pips to 6.7671 – the most significant single-day jump in over two years, the AUD/USD lost 30 pips straight off the bat falling from 0.7350 down to 0.7318. The timing of the massive CNY devaluation indicates the world’s two biggest economies are likely moving towards a full-fledged currency war. Consequently, the AUD and Asian currencies have come under pressure.

The local unit recovered offshore as President Trump blamed China for manipulating their currency and again criticizing the Fed for raising rates. Treasury Secretary Steve Mnuchin tried to walk back Trump’s criticism of Fed rate hikes and comments on currency manipulation, saying the president respects central bank independence and is not trying to interfere in FX markets. The AUD/USD gathered momentum and moved back towards the 74c handles closing Friday’s session at 0.7403.

Look ahead; the Australian economic calendar is light until Wednesday where we see Q2 CPI.

 

 

 

  New Zealand Dollar

CAD / NZD Expected Range: 1.1154-1.1218

Buoyed by broad-based USD weakness the New Zealand dollar was the day’s top performer on Friday, jumping back through 0.68 U.S Cents. The Greenback dropped against major counterparts after President Trump doubled down on his disdain of the Federal Reserve and their current dogma of tightening monetary policy. The President took to Twitter to dispel his displeasure at China and the EU for deliberately manipulating currencies and interest rates while the Fed continues to hike baseline interest rates and place unfair upward pressure on the USD.

Rallying to touch intraday highs at 0.6810 the Kiwi found renewed support in stronger commodity prices however looks stretched approaching resistance at 0.6850. With speculative shorts still at records highs, the NZD remains vulnerable to correction and a move back below 0.67 as attentions turn to Wednesday’s Trade Balance print as the only big-ticket item on to docket moving into the week ahead.

 

 

 

Posted by OFX

Guide to Expanding your Business Internationally

Great tips on what you should know about growing your business globally. Jason Kumpf, of OFX Global Money Transfers, offers a brief guide that some of his clients use to expand abroad successfully.

OFX – Great tips on what you should know about growing your business globally.

Jason Kumpf, of OFX Global Money Transfers, offers a brief guide that some of his clients use to expand abroad successfully.  With advanced technology, free trade agreements, and globalization, it’s easier than ever to grow your business operations into overseas markets. Managing your currency exposure may give you the competitive edge you need to protect your profits abroad.

In this guide, Jason Kumpf from OFX will help explain:

  • Statistics regarding how many companies are expanding overseas
  • The best markets to expand into
  • What you should consider before going overseas
  • How to protect yourself against currency exposure
  • The best ways to bring your profits home
  • How to transfer profits from online marketplaces

 

How many businesses are growing overseas?

Jason Kumpf from OFX tells us that more and more businesses from all over the world are taking the leap into the international marketplace.

According to a new DMCC report, 42% of businesses in the United Kingdom are exhibiting interest in working overseas, particularly following the Brexit vote to leave the European Union. Business owners in the U.K. are hoping to expand into attractive emerging markets, while establishing a stronger global presence and accessing the wealth of available resources and talent that can be found abroad.

Of course, Jason Kumpf also wants us to remember that U.K. businesses aren’t the only ones looking abroad. According to the United States Chamber of Commerce, 80% of the planet’s purchasing power, along with 95% of the globe’s customers, are found outside of the U.S. Experts know that profits are going to be found in the large emerging markets of the world, where a growing middle class is providing a market for a variety of services and goods.  In 2016, 47% of businesses in the U.S. stated that they expected their profits from international activity to rise that year, and 87% of companies agreed that expansion overseas is necessary for long-term growth.

Australian businesses are also finding that investing overseas can help them remain competitive despite the evolving trade landscape around the globe. Jason Kumpf from OFX also mentions that the top locations for foreign affiliates of businesses include New Zealand, the United States, the United Kingdom, Hong Kong, and Singapore. And one-third of the country’s top 2,000 businesses have investments in an offshore market, with manufacturing brands investing in the highest number of overseas businesses.

 

Which countries are considered the best for business?

Jason Kumpf says that working with clients around the world has educated him on the fact that different markets provide different opportunities for business expansion. Only you can decide which market will be optimal for your unique business proposition. However, some countries are more friendly to foreign businesses than others. These have been named the best countries for business by Forbes:

  • Sweden
  • New Zealand
  • Hong Kong
  • Ireland
  • United Kingdom
  • Denmark
  • Netherlands
  • Finland
  • Norway
  • Canada
  • Australia
  • Singapore

 

Top 5 things to consider before doing business overseas:

  • Your USP may be more viable in one market than another. Be cautious before entering a market where your competitors are already operating as there may be cultural nuances that affect your ultimate success in a given market. Resist the temptation to follow your competitor into a market without the necessary market research for your brand.
  • Your brand may need an update. Consider how your brand will translate in an overseas market in both visual and verbal application. Find the best way to communicate your brand story in a totally new market with totally new customers.
  • You’ll be due for a business trip. Anytime you’re expanding overseas and especially if you’re selling online, you may want to visit a country before deciding whether or not you will do business there. Consider hiring a guide or translator with connections in your industry, so that you can see the competition up close. A guide may help you find new distribution channels or networks to speed up your supply chain and can assist you with understanding typical employee expectations if you’re tapping into the local workforce.
  • You may need to invest in your legal team. Ensuring your business complies with local laws and regulations is essential for expanding your business abroad. Of course, legal counsel with strong local knowledge will also help you establish agreements with partners and employees.
  • You’ll need to check in often. Jason Kumpf mentions that in addition to managing your business at home, you will need to be in regular communication with your sales reps, distributors, and colleagues overseas, so budget your time and resources accordingly.

 

How can you protect yourself against currency exposure?

One of the biggest challenges of doing business abroad is currency fluctuations. Hardly a week goes by without a news report of a major currency move. Jason Kumpf says this is an area where having a focused FX group transacting for you can be useful.  That’s why it’s essential to protect your payments to overseas staff and suppliers by developing a sound currency strategy.

 

Top 5 ways to reduce currency exposure

  • Consider hedging. You can use a Forward Exchange Contract to lock in a preferred exchange rate for up to 12 months, so you can keep your cash flowing as predicted.
  • Lock in a Limit Order. If your money transfer dates are flexible, use a Limit Order to set your target exchange rate. When the rate is right, you just confirm the transfer, so you can stay on top of the markets even while you’re out playing golf.
  • Reduce the amount of time between an invoice and a transaction’s settlement. Jason Kumpf mentions that this is an obvious benefit for any business but is sometimes overlooked. Doing so may help protect your company against extreme currency fluctuations that could hurt your bottom line.
  • Negotiate all contracts with currencies in mind. Many suppliers prefer to be paid in currencies like USD, EUR, or AUD. Major currencies may be less susceptible to large fluctuations than emerging market currencies, which could benefit your business. That said, if your supplier is converting costs in Indian rupees into dollars, they could potentially overcharge you on the exchange rate unless you have one specified in the contract.
  • Stay informed. Once you go global, market movements start to matter more. Sign up for a daily or weekly FX update to get the news you need.

 

What is the best way to bring your profits home from abroad?

Jason Kumpf from OFX mentions that can help you save up to substantially in exchange rate margins on any bank-to-bank transfer across 55 currencies. For major currencies, margins can be up to 75% less than what the banks charge, so you can keep more of your hard-earned cash. On top of that, our delivery times are often faster, because we use local banking networks to move your money whenever possible. That means we can often offer same day or next delivery to major markets.

 

What is a good way to transfer profits from online sales overseas?

Depending on the size and scope of your international business you may or may not be eligible to get a bank account abroad without residency or investment minimums. If you’re selling online, that can mean expensive fees and costs when bringing your revenue across borders on marketplace like Amazon and Ebay. Jason Kumpf mentions that some platforms have solved this problem for Online Sellers. With our Online Sellers account, it’s as if you had a local bank account in all your major markets: USD, EUR, GBP, AUD, HKD, CAD and JPY.

If you are one of the many businesses that have expanded internationally by selling on marketplaces like Amazon, eBay, Walmart, Groupon, and Rakuten, Jason Kumpf form OFX reminds us that you can use your foreign exchange platform to swiftly and securely bring your money home. In doing so, you could save substantially on foreign transaction fees and margins.

While online marketplaces often charge margins of nearly 4% on cross-border payments, Jason Kumpf of OFX mentions that FX platforms may only charge 1.5% or less above the daily market exchange rate, depending upon how much you are transferring.

You can even use your foreign exchange platform to send payments to your suppliers. You can also automate the delivery of your funds or choose when to transfer the money, giving you more control over your profits.

Posted by OFX

Best way to transfer funds internationally

Do you need to transfer funds internationally? Here are a few key ways to reduce the time and costs commonly associated with the international fund transfer process.

OFX – Do you need to transfer funds internationally?  Perhaps you need to send money from the US, UK, Australia, Canada, Europe or Hong Kong to another county.  Are you relocating, transferring an investment, buying property and have the need to transfer a larger sum of money? Or are you transacting for your business, paying suppliers or opening a new international office? If you are moving over $10,000, you may appreciate speaking with a professional to assist you with your transfers and to receive a better rate.  There are a few key ways to reduce the time and costs commonly associated with the international fund transfer process.  Jason Kumpf, Director of Strategic Partnerships at OFX Global Money Transfers helps accounting, financial advisors and international clients utilize simple techniques to save time and money when they send funds. He offers his suggestions on how to receive a better foreign exchange rate from his experience in the industry at OFX, which has helped deliver over $100 Billion for clients.

From international transactions professional, here are Jason Kumpf’s suggestions on how to transfer funds internationally, for relocation, real estate purchase, company expansion or a thousand other reasons:

 

1. Use the Yahoo Finance Currency Converter to check the foreign exchange rate. Then, Jason Kumpf of OFX Global Money Transfer recommends registering up with a Foreign Currency Transfer and Exchange group.  Then you can converse with a foreign currency expert well in advance of your intended transfer.  After registering, you will be able to receive live quotes of the currency pairs of interest and be set up to receive better rates.

2. Stay up to date on the currency pair you need to exchange. Utilize your foreign currency exchange group’s free tools such automatic rate alerts.  Establish rate alerts to receive messages when the currencies reach the rate you desire.  You can easily accomplish this with an excellent foreign exchange group, even booking limit orders if you are aiming to book deals once the market reaches your target price.  Jason Kumpf says that clients and partners appreciate the rate alerts and limit orders.  These simple tools can keep them from missing opportunities when currency prices fluctuate.

3. Compare the service and currency rates from your bank to the service and rates from your new foreign exchange group. You may be surprised by the difference between what you receive from your bank compared what you receive from the foreign exchange groups.  A foreign exchange group should offer you a better service and rates than what you are used to being offered because that is their focus.  Many financial groups can include a hidden margin in the exchange rate they offer you that can result in a hidden cost of a few percent to your transfer.  On a $100,000 transaction, you could be overpaying by a thousand dollars with a poor rate, that you could have avoided.  Jason Kumpf says; “There is usually a nominal $40 transfer fee, but the real cost can be in receiving an unfavorable rate.

4. Learn more about the foreign exchange rate market. Some financial groups may offer poor service and rates, especially if you are only sending tens of thousands to even a few million.  Those amounts may not be enough to receive the best foreign exchange rates or qualify you for the best service.  Remember, the daily foreign exchange volume is tremendous.  So, unless you are dealing with a specialist currency exchange group that focuses on clients like yourself, you could be overpaying for your currency and not be experiencing the service you deserve.  Jason Kumpf says; “Besides the rate, having a helpful person to call 24 hours a day, regarding transactions, can be a huge advantage for a business or individual.”  Your typical banker is focused on lending, and foreign exchange is usually not their focus or expertise.  Your dealer at a foreign exchange group is 100% focused on helping you with your foreign exchange transactions and works all day long only on international payments. They have the global expertise that can properly assist you.

5. Open your foreign exchange account in advance of your intended transfer date. There are many advantages to taking the ten minutes to open your account early.  You don’t want to miss out on the potentially better rates if you become too busy and don’t have the documents you need with you, and it ends up taking longer to open your account.  Because there may be extra documents you need to provide if you are sending over $10,000, it is wise to open the account early.  In addition, it usually takes a business account a few days to be opened.  Plus, you will have more time to choose your rates, versus being forced to take the rate on the final day you need to send the funds.  Most groups do not charge any fees for opening an account and receiving quotes, and you can speak to a foreign exchange specialist to be informed about the rates months in advance of your transfer.

6. Find a high-quality group that offers 24-hour seven days a week in-house live agent support with an easy to use online platform. Jason Kumpf of OFX Global Money Transfers suggests using a larger, established foreign exchange money transfer group that offers both online and live agent support. You want to make sure that if you are traveling or need to speak to someone after traditional banking hours, you can do that.  Also, it helps if the foreign exchange experts you talk with are in your country and are familiar with your circumstances, not an outsourced call center agent.  Some groups have agents that help with personal transactions, and other usually senior dealers that specialize in corporate transactions.

7. Importantly, consult your financial advisor, accountant, and or tax professional before making any financial decisions. Many advisors, accountants, and cross-border groups partner with foreign exchange groups to offer their clients the latest tools and services to improve their clients’ international activities.  If yours doesn’t, you can bring tools to them for their opinion.

In conclusion, when you want to transfer funds globally at the best rates, Jason Kumpf says: “If you want to possibly save a few percent on your currency exchange rate simply and securely, you may want to speak to a foreign exchange group.”

Posted by OFX

International Transfer Provider OFX Launches Payments API

Foreign currency exchange company OFX (ASX:OFX) today announced the launch of a developer portal, designed to provide the global developer community with easy access to the company’s new Payments API.

March 14, 2018

Foreign currency exchange company OFX (ASX:OFX) today announced the launch of a developer portal, designed to provide the global developer community with easy access to the company’s new Payments API.

OFX aim to remove obstacles for international businesses that want total confidence when building cross-border payable and receivable processes. Partners such as marketplaces, service platforms and SMB’s can now automate all international payments directly through their own platform and participate more freely in the interconnected global economy, with access to OFX’s competitive exchange rates and domestic settlement network. For developers, the portal offers personalized dashboards to create and manage applications with plug and play RESTful APIs, clear documentation, high industry standard service level agreements (SLAs) and an analytics dashboard.

David Nicholls, Director of Enterprise Development at OFX commented: “Our new platform gives our integrated partners the ability to scale globally and accelerate the software build processes. Most importantly they save on foreign exchange rates and largely bypass expensive wires by accessing one of the worlds largest local settlement networks. We launched a beta version in November last year, and our early adopters are reporting easy integrations. Now the platform is open for any developers to register and try our Payments API Product in the sandbox environment. We have an extensive roadmap to add features to the platform so partners and developers can take advantage of the increasing suite of OFX services via API. We’re committed to helping our customers manage the pace and complexity of cross-border business.”

Developers at supply chain finance solutions company Octet have seen immediate process efficiencies: “Our team was confident that the OFX Payments API was simple and easy to work with and superior to the alternatives on the market. Once the decision was made, we were fully integrated within a couple of working days,” said Octet chief operating officer Michael Rom. “We saw our processing costs drop significantly over six months.”

“As the world moves to a place where automation, scale and efficiency are a basic need, the OFX team are striving to build products which foster partnerships with businesses and developers, to help shape long-term digital payment innovation,” said Skander Malcolm, CEO at OFX.

A global company with its North American headquarters in San Francisco, OFX continues to focus on advancement in the tech, product and payments space. Founded in Sydney in 1998, OFX remains an innovator as the first Australian Fintech to launch an International Payments API on a self-serve developer platform.

Interested parties can register here to access the OFX developer portal.

About OFX

OFX gives consumers and businesses a smarter, online and mobile alternative to existing currency exchange services. Since its launch in 1998, OFX has transferred more than $100B in 55 currencies across the globe. Drawing from two decades of experience, OFX Group is a leading global money transfer business, with over 300 employees and offices in San Francisco, Sydney, Toronto, London, Hong Kong and Auckland.

The OFX Group Limited is a publicly listed entity on the Australian Securities Exchange (“ASX”) under the code “OFX.” The OFX Group consolidated services under the global brand OFX from prior brands OzForex, UKForex, USForex, CanadianForex, NZForex, Tranzfers and ClearFX. OFX also powers the international money transfer services of Travelex, MoneyGram, ING Direct, Macquarie International Money Transfers and other international financial institutions. USForex Inc. dba OFX. OFX is the registered trade name for USForex Inc. a licensed money transmitter. NMLS #1021624. For more information on OFX, visit OFX.com.

Contacts:

For more information:
Justin Lavelle Communications, LLC
Justin Lavelle, 703-912-7671
justin@justinlavelle.com
or
OFX
Melita DeHazes, 415-364-6614
melita.dehazes@ofx.com

How to save on International Money Transfers To Pay International Contractors

Ever wondered how to save when paying overseas employees or contractors in foreign currencies? Find out more…

OFX – Here’s how to save when you pay overseas employees and contractors in foreign currencies: 

  1. Research creating an account with an online International Money Transfer Group to save on foreign currency payments and mitigate exchange rate risk.
  2. Log in or call 24/7 to receive a live quote for international transfer rates.
  3. Check your rate against the interbank rate on Yahoo Finance and see how much you are paying.
  4. Collect the necessary banking information, including your recipient’s name and bank account number.
  5. Set up a one-off or recurring payment or pay up to 500 suppliers at once with a multi-pay system.
  6. Track your transfer(s) with the International Money Transfer group’s mobile app.

 

Jason Kumpf of OFX says that: “The world is getting smaller as businesses of all sizes expand across the globe. Competitive companies need a simple, reliable way to promptly pay their employees while complying with all relevant tax laws in their home country.”

With the proper plan and strategy, you can use the power of foreign currency exchange to drive the global future of your business while minimizing costly delays and complications.

 

Paying independent contractors in other countries

Every single one of your employees need to get paid, from the accountant in the corner office down the hall to the contracted designer creating Photoshop miracles in Calcutta. These payments need to be prompt, predictable, and affordable in order to make good business sense, while streamlining your operations.

By using an International Money Transfer service to pay your international employees, you can save money, first and foremost. Online Money Transfer rates are usually significantly lower than those of high typical banks, and with repeated payments to multiple employees, these savings add up fast.

Jason Kumpf of OFX also mentions that using an online International Money Transfer group usually also means your payments arrive sooner. If you choose a leading provider with a global network of many local bank accounts, that will usually mean your payments can often be processed same-day. And because they use local networks to process most transfers, you can probably kiss all those confusing international banking codes goodbye.

When paying foreign contractors for services or paying overseas suppliers, it is crucially important to consider your business’s appetite for risk and to develop a currency strategy. Your FX’s group’s dealers should be able to help you manage your currency exposure through the use of tools such as Forward Contracts which allow you to lock in an exchange rate for up to 12 months, so your cash flow stays predictable even when the forex markets aren’t.

When sending large sums of money across the globe, you want speed and security. A better FX provider will offer clients 24/7 customer support, so even if your bank is closed, your FX group is open and ready to help you capitalize on international opportunities.   Jason Kumpf at OFX and says that he has partners saving their clients thousands of dollars a year with better foreign exchange rates.

Plus, with a multi-pay option, you can have the ability to pay hundreds of employees with a single click. You save time, cost, and operational efficiency. Your employees? They get paid faster. That’s what Jason calls a win-win.

 

How to pay international employees from the U.S.

In order to comply with federal laws in the United States, there are certain steps you must follow when paying foreign workers outside the country.  It’s best to consult a tax professional about your unique circumstances. Keep in mind though that state and local taxes vary, so you should always speak with a professional about your particular business requirements.

 

How to pay international employees from Australia

In order to comply with federal laws in Australia, there are certain steps you may need to follow when making payments to foreign contractors for services.  As always, consult with a local tax professional to determine your obligations.

 

How to pay international employees from the U.K.

In order to comply with national laws in the United Kingdom, there are certain steps you may need to follow when making payments to foreign contractors for services.

 

Things to consider when paying foreign independent contractors

Of course, like foreign independent contractors, not all international payment options are created equal. Below are some helpful guidelines to help ensure you pick not just the biggest, flashiest, or newest currency transfer service, but the best one for you and your business’ needs.

Jason Kumpf mentions that “better exchange rates make an enormous difference in your bottom line and operating expenses, especially when you’re talking about making recurring payments to dozens or hundreds of contractors. Overpaying once isn’t a huge deal; overpaying thousands of times is. A good FX provider should be able to offer superior exchange rates to those offered by most large banks.”

Consistent service is more than just a successful one-time transfer. With something as sensitive and mission-critical as money transfers and payments, it is important to do your research and choose the right company, not just a company.

If you are going to make regular, recurring payments to employees – as you likely are – you should choose a company that is capable of providing superior customer service. Your provider should be flexible, responsive, and receptive to your specific needs, and should demonstrate via their actions how important your business is to them.

You should be able to tailor your experience to your business needs. Choose a provider that allows you to do so. Jason Kumpf mentions that a leading Money Transfer Service, such as OFX can mirror your internal verification processes and gives you 24/7 access to our robust platform, so the boss can easily approve the transfer even while working overseas.

Speed matters when paying employees. Your money should move quickly, just like your business. Major currency conversions should be processed within one business day once a leading Money Transfer Service receives your funds. That way your money moves on your schedule and not your bank’s. When you use a leading FX Group, you may be able to speed up your supply chain by avoiding your bank’s arbitrary cutoff times and frequent bank holidays.

What’s more, speedy money transfers are important for both your operations and accounting departments, as well as your employees. With quick, competent money transfer services, you don’t need to worry about the logistics of your payments. You can forecast and plan for when funds should arrive, be received, and leave your accounts, allowing for much more precise and reliable financial planning and accounting. International payments do not need to be nebulous mysteries anymore because you can usually track each transfer on your Money Transfer Provider’s mobile app.  Jason Kumpf mentions that security and speed are highly desired by the Accounting Firms and Departments he partners with.

There are some affordable peer-to-peer payment options available on the market, but these platforms are much less robust, reliable, and consistent than leading established platforms. They may not be able to handle market volatility like Brexit, so your business may be better off with a larger provider who can move your money even during massive market turmoil. With peer-to-peer options, your funds could be waiting in limbo for days or weeks; meanwhile, your employees are growing dissatisfied with their non-payment, and you are wondering where in the world – literally – your money is. (Not to mention the fact that some peer-to-peer services cancel your transfer entirely if the rate changes by more than 3%.)

You should have options. Currency volatility is a reality in the currency exchange market, and as with any strategic business risk, you should take all the steps available to you to minimize and mitigate it. To insulate your business from undue risk, choose a provider that gives you the flexibility to match your business strategy and goals to a proper risk management strategy.

With a leading Money Transfer Service, you should have several options. Services like Limit Orders allow you to dictate an exchange rate with which you are comfortable and only confirm payments when that rate is reached. Additionally, many provide Forward Contracts, which allow businesses to lock in favorable exchange rates for up to twelve months if they fear future volatility and are comfortable with the current market rate.

Plus, a multi-pay gives you one-click efficiency to pay up to 500 workers at once, so your business can scale quickly and confidently without many of the common operational growing pains associated with expansion.

 

How to pay foreign independent contractors with a Money Transfer Service

A Money Transfer Service can be used to quickly and reliably make payments to international contract workers.

Simply log-in to your account to check the current exchange rates in real-time. Then, submit a Single or Recurring transfer using the required banking information you collected from your international employees. You can then track your transfer using the mobile app, so you know exactly where and when your payment was received.

So go ahead: onboard those new contractors! Expand into new markets and bring on foreign employees! Aim big and broad! See for yourself: By using a Money Transfer Service, the right currency exchange service makes a world of difference.

Remember, always check your rate at YahooFinance and see how your bank or provider is charging you.  There are many options, and some groups may offer better rates than others.

 

Posted by OFX

How to pay international invoices with foreign currency and save

Published by OFX

International Business Tips:  How to pay invoices in a foreign currency:

  1. Find a better foreign exchange rate provider, Jason Kumpf from OFX mentions that: “online platforms may offer better rates than typical bank rates.”
  2. Save on foreign currency payments buy receiving live quotes for international currency transfers and better manage foreign exchange risk.
  3. Consult a local tax accountant to discuss any regulation that affect your business in your country and jurisdiction. There are differences in international taxes between the US, UK, Australia and Canada, you will want to discuss your company’s international business with an international accounting and tax group, not your foreign exchange group.
  4. Navigate the options of international invoices to enjoy the benefits of optimizing your global payments.

Many of Jason Kumpf’s clients say the greatest thing about the onset of the digital global economy is the ability to find high-quality professional services and products anywhere on earth. Whether you need to hire contractors or source competitively priced supplies from overseas, you now have the ability to get the best talent and products in the world, at the right price for your business.

Global sourcing may provide exciting and profitable opportunities for your business, but paying invoices in a foreign currency is an important process to get right. Jason Kumpf from OFX reminds us that: “Exchange rate fluctuations can affect your margins, so it’s worth taking a closer look at how to pay international invoices in a way that protects your business from unnecessary risk.”

 

The benefits of paying invoices in a foreign currency

When paying foreign employees, you have two primary options: pay in your own currency or pay in the local foreign currency. Sometimes, you can save money by choosing to pay in a foreign currency if you can secure a good rate and potentially lock it in with a forward to secure your rate.  If the rate moves in your favor, you still receive your locked in rate, and don’t gain an extra currency related profit, but if it moves against you, you don’t lose any gains you locked in due to that currency fluctuation either.

Some contractors charge more if you don’t make the payment in local currency, and they have to convert the currency themselves. In this scenario, your business may lose control over the exchange rate, and suppliers may build in a hefty margin that boosts their profits at your expense. To avoid this, make payments in the local currency and consider establishing terms under which the contract will be renegotiated if the exchange rate moves substantially (i.e. ‘pricing will be reevaluated if the exchange rate moves three percent or more from xx value.)

 

Making foreign currency payments in USD

There are a few notable exceptions to the above guidelines, namely China and Malaysia. In countries where the local currency is heavily regulated, suppliers may prefer to be paid in U.S. dollars, so they retain more flexibility in moving their money. If your supplier is keen to receive payments in U.S. dollars, you may be able to negotiate even better pricing than if you paid in the local currency. Either way, ensure that your contract specifies which currency you’re obligated to make the payment in.

 

Managing risk when paying invoices in a foreign currency

Anytime you’re making payments abroad or investing overseas, your business will be exposed to risk in the form of currency fluctuations. In today’s political climate, such fluctuations can be profound and sudden, which is why many businesses mitigate their risk by using a Forward Contract to lock in an exchange rate for up to twelve months. Doing so allows your business to keep cash flowing as projected, no matter what happens in the fickle currency markets.

If you’re concerned about how currency risk may affect your bottom line, defiantly speak with a dedicated specialist who can help you develop a custom currency strategy that’s right for your business.

 

How to pay invoices in a foreign currency with most online platforms and apps.

Paying invoices in a foreign currency couldn’t be simpler in today’s online and smartphone app environment.

Most platforms allow you to download all your transactions so that you can upload them into your accounting software to make foreign currency invoice accounting simple.

Jason Kumpf from OFX says its relatively simple to use the latest tools to save on foreign exchange transfers. To save money on all your international invoice payments, create an account with the provider of choice. Once you’re ready to pay the invoice, log in to get a live quote. Then, enter the banking details for your intended recipient, including the name on the account and bank account number. Different providers have slightly different systems and try to simplify the process, a few have live 24/7 customer support, which can be helpful, especially for your first transfer.

Some platforms will allow you to set up recurring payments at fixed or non-fixed rates of exchange, so you can automate your international invoice payments and save time.

 

Gain greater control of your business

When you use an online currency provider to pay invoices in a foreign currency, you can instantly see the savings over the traditional banks by getting a better exchange rate and comparing them before you even book a transaction, so you know you are saving upfront. Some banks and online marketplaces charge up to 5% per transaction for currency conversions. That’s $500 on each $10,000 payment. You can save every time you do payroll when you make the smart switch to an online currency exchange platform.

The top global foreign exchange providers offer robust currency platforms that are designed around your business needs. With the best, you can book your transfers 24/7, which may help expedite your supply chain.

Jason Kumpf of OFX also notes that: “If you employ a diverse international workforce, you can offer an online currency provider can be a great global mobility employee benefit as a number of Fortune 500 have discovered.”

 

How to pay invoices in a foreign currency from the U.S., U.K., Canada and Australia

Consult a tax accountant in your local jurisdiction to answer questions that may be specific to your company, business and the locations your are working in.  There are certain steps you must take to comply with your local tax laws when paying foreign invoices from overseas employees. Please be advised that most currency groups do not provide accounting or tax advice, and neither does this article or any person or company mentioned in it, so consult an account and tax professional before proceeding.

With the ability to pay invoices in a foreign currency, a whole world of business opportunities opens up to you! Find the right, reliable foreign currency provider and help make your plans for world business expansion a reality.

Post by Jason Kumpf OFX Global Payments

How to save when you purchase international products

To buy overseas products:

The Summary:

  1. For high-value items, research your country’s laws regarding imports from abroad, including any taxes or fees that you will be required to pay.
  2. Investigate which countries provide the best deals on the products you desire.
  3. If you are using a credit card to pay, factor in the cost of a foreign transaction fee and currency conversion markups.
  4. Create an account with an international money transfer group to save money on a bank-to-bank transfer. Jason Kumpf of OFX recommends you to: “Transfer your payment online to avoid fees and high margins that are charged by credit cards and banks.”

Buying goods from overseas is easier than ever, thanks to the internet, and it could be a great strategy if you are trying to save money. You could shop for your favorite designer brands from the comfort of home without having to travel anywhere. And when you factor in currency conversion rates, you might even be able to stretch your money further and buy more. This is especially helpful when you are hoping to invest in luxury items or one-of-a-kind antiques and collectibles.

Jason Kumpf works with many online store owners and says: “If you are planning on purchasing items to resell in your online shop, sourcing your inventory from abroad could also give you the chance to take advantage of savings that you can’t find domestically. In turn, this might help to increase your profit margins as you continue making competitive sales.”

But before you shop online for a luxury product or for inventory for your business, there are a few strategies that you should employ when buying overseas products.

Know Your Country’s Laws Regarding Imported Goods

When importing luxury items from abroad, you should be aware of your nation’s customs laws and the taxes that you may be required to pay for the items that you bring home. Beyond that, it is also important to be aware of any laws regarding restricted items, or those that you are not allowed to import into your country at all.

If you are living in Australia and the products that you are importing are worth more than $1,000 AUD, it is likely that you will be required to sign an import declaration. You may also be required to pay duty and GST.

In Australia, weapons that include daggers and guns might be restricted or prohibited, or you might need to prove that you have the appropriate permits to purchase those items. Also, wood-based products might need to be treated or quarantined in order to reduce the risk of introducing diseases and pests, and you will have to pay for any costs associated with those treatments.

If you are living in the United States, it is highly recommended that you contact your state treasury office and your local treasury office in order to determine if you will be required to pay any state or local taxes on the products that you are planning on importing. Just keep in mind that every state will have its own tax laws that you need to research, and getting help from a local port of entry will assist you in determining which duties and taxes, as well as fees, you will need to cover.

Tobacco and alcohol products are considered restricted, and you might have to pay a Federal Excise Tax when importing those items.

If you are living in the United Kingdom, buying from other countries in the European Union will be easier, at least until Brexit is complete. For example, as long as the U.K. is still a part of the E.U., if you are investing in products from outside of the E.U., you might be required to pay Customs and Excise duties, as well as VAT.

Items that are brought into the United Kingdom will go through customs in order to ensure that they are not restricted or banned. Some of the products that are not allowed include, but are not limited to, offensive weapons, self-defense sprays, endangered plants and animals, and any food or plant products that are not free of diseases and pests.1

For much more detailed information on this topic, check out our Guide to Importing Luxury Goods Purchased Abroad.

Shop from Countries with the Lowest Prices

Knowing where to shop for goods from overseas will also give you the chance to save money whenever you are making investments into luxury items or your online storefront.

Jason Kumpf says that a lot of e-commerce business owners choose to purchase their inventory in bulk from online suppliers. For example, shopping from product distributors in Asian nations, such as China, might help you save the most money when you are sourcing your inventory for your online shop. This is especially true if you are hoping to buy wholesale. But when it comes to shopping for luxury items, China might not be the most affordable choice after all.

In terms of luxury goods, Italy is at the top of the list when it comes to the number of luxury companies it has, but France maintains the greatest share of luxury sales. And the countries with the lowest prices on luxury items include Italy, France, and the United Kingdom.2

Kumpf mentions that even customers from Asia are shopping for their luxury goods in Europe because they can save money by doing so. This is because, in China, luxury items will cost roughly 21% more than the global average. On the other hand, those same luxury items are roughly 22% less than the global average when they are sold in Italy and France. This is a result of the duties and taxes that are applied by the Chinese government, as well as exchange rates and other costs, such as distribution costs, that drive the price of goods up.3

Consumers who are hoping to purchase designer brands can save quite a bit of money when they buy those items in Europe. Louis Vuitton products, for example, could be upwards of 50% more in China, and Armani goods could be as much as 70% more in China versus in France. Balenciaga items are roughly 25% more costly when purchased from China.3

Keep in mind, however, that currency exchange rates are always changing, and they can vary from one day to the next. Ultimately, to be sure that you are getting the best deal, you should consider using a currency converter prior to finalizing a purchase. With the right exchange rate in place, you can spend even less, whether you are shopping from Europe, Asia, or anywhere else in the world.

Take Foreign Transaction Fees into Consideration

Whether you are shopping abroad in person or over the internet, you might incur a foreign transaction fee if you are working with an international merchant. This fee is charged by the majority of credit card companies and banks in order to cover their own costs for converting your local currency into the appropriate international currency when you make a purchase.

To shop smart and avoid having to pay a foreign currency exchange fee, you can see if you qualify for a credit card that does not charge this fee at all. Just keep in mind that these cards can be difficult to find and even harder to qualify for. And they also often come with fine print that includes having to pay other fees or getting hit with other restrictions in exchange for the ability to avoid foreign transaction fees.

Because the average foreign transaction fee that is associated with credit cards is 3%, you may be able to save a lot of money by finding alternative ways to pay for your goods from abroad. This is especially helpful when you are purchasing expensive luxury products, as well as when you are buying items in bulk for resale in your own online shop.

Keep in mind that the exchange rate used for a credit card purchase abroad is often at the discretion of the issuing bank. If a bank uses its published daily exchange rate when converting your funds, you could pay a margin of up to 5% above the live rate.

Jason Kumpf of OFX Global Payments recommends says: “Rather than relying upon a credit card to make a payment, you can transfer your money at a better exchange rate by using OFX. In doing so, you may be able to avoid not only credit card fees but also some bank fees as well.”

Submit Your Payments via an Online Transfer Service

A better way to pay for your luxury goods, as well as your e-commerce inventory, is by using an online transfer service to submit your payments. You can keep more of your money when you transfer it directly to the seller via a bank-to-bank transfer (just don’t use your bank to make the transfer, if you want to save money.)

Setting up a transfer through most online transfer groups is easy, because you can do it all online.

When you use an online international payment group, you may be able to get your goods sooner because most transfers to major markets typically take less than 1-2 business days.

For large purchases of expensive luxury items or bulk items, Jason Kumpf suggests that you set up recurring transfers on a schedule, provided that the seller will allow you to pay in installments. Or you can use a Limit Order to set your preferred exchange rate and be notified once it is triggered so you can shop while enjoying the benefit of an exchange rate that helps you save even more money. And if you are not ready to pay just yet but you want to lock in a great exchange rate, you can usually set up a Forward Contract for up to 12 months.

With the right payment strategy, you can make a luxury purchase without reservation. So go ahead and purchase that antique car from abroad that you have been eyeing. Once you submit your payment with your online platform, you might have money left over to give it a brand new paint job once it arrives home.

Shop wise and save

In the end, it is important to do your research before purchasing items from another country, whether you are investing in designer goods or you are hoping to build up your online shop. Understanding what taxes you might owe on imports, as well as where you can find the best deals, will help you make the wisest buying choices. Jason Kumpf mentions: “To ensure you save money on fees and margins that are associated with paying overseas sellers, simply using a leading foreign exchange service.”  That could be just what you need to stretch your budget so you can buy even more.

Posted by Jason Kumpf OFX International Money Transfers

OFX

US Dollar falls to test 2017 low ahead of CPI data. EUR and GBP both jump further after Thursday’s ECB bombshell

January 12, 2018 – Nick Parsons | Posted by OFX

United States Dollar

The last 48 hours have been pretty wild for the US Dollar. ‘Fake news’ from China had seen it fall sharply then erase all its losses before the ECB’s bombshell hit the foreign exchange market on Thursday and sent the USD tumbling once more. Having recovered from 91.60 to a high in London of 92.17, the US Dollar Index against a basket of major currencies fell sharply throughout the New York session to end the day back down at 91.50.

This morning in Europe it has fallen further with the index now back testing the 2017 low of 90.98 on September 7th. As well as the ECB news, the USD was not helped by a very soft set of US PPI figures. The Labor Department said its producer price index for final demand slipped 0.1% last month. That was the first drop in the PPI since August 2016 and followed two straight monthly increases of 0.4%. In the 12 months through December, PPI rose 2.6% after accelerating to 3.1% in November. There isn’t a perfect – or even a very good – correlation between PPI and CPI on a monthly basis. Indeed, if there was, there’d be no need to publish CPI figures separately or for markets ever to worry about them: all the fresh information value would be in the PPI. We’ve said before that the FX market reaction is often to shoot first and ask questions later, so it would have been a brave analyst who stood up in the middle of a busy dealing room to announce that the PPI figures didn’t matter.

The market has passed its verdict that soft PPI means expectations for CPI today should be lowered. That might be a wrong assumption but we’ll see this morning when the numbers are released at 08.30 Eastern Time. Consensus expectations are for a +0.2% m/m gain to leave the annual rate of CPI inflation at 2.1%. Separate but simultaneously released numbers on December retail sales are expected to show both the headline and core (ex-autos) measures rose 0.4% on the month.

The US Dollar index opens in North America this Wednesday morning at 91.00.

Live Rates on the Yahoo Finance Currency Converter


Canadian Dollar

USD/CAD expected range: 1.2430 – 1.2585 

The Canadian Dollar has had a very poor week so far week as investors start to question whether a lot of good news is already ‘in the price’ and whether a rate hike at next Wednesday’s BoC monetary policy meeting really is a done deal.

A week ago, after the latest labor market report, USD/CAD touched a low of 1.2375. By yesterday afternoon in New York it had risen to a high of 1.2585 before settling down in Europe this morning in the low 1.25’s. Even two days after the news of a potential US withdrawal from the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, we are still none the wiser as to what the US’s true intentions are and what economic impact it may have either side of the Canada-US border.

Among the most divisive proposals said to come from the US side are plans to establish rules of origin for NAFTA goods that would set minimum levels of U.S. content for autos, a sunset clause that would terminate the trade deal if it is not renegotiated every five years, and ending the so-called Chapter 19 dispute mechanism. President Trump has long called the 1994 treaty a bad deal that hurts American workers and during the presidential campaign, called it the “worst trade deal in the history of the country.” Officials are due to hold a sixth and penultimate round of negotiations in Montreal from January 23-28th and it is now widely expected that Mr Trump might deliver a letter giving 6-months’ notice of an intention to withdraw from the agreement. The only official comment from the White House is that, “there has been no change in the president’s position on NAFTA”. We’ll see if the weekend Press and news media can shed any further light on the matter.

The Canadian Dollar opens in North America this morning at USD1.2520, GBP/CAD1.7070 and AUD/CAD0.9855.


Euro

EUR/USD expected range: 1.2030 – 1.2250 

The euro was quietly trading in the USD1.1940’s in the European morning on Thursday, caught between the usual opposing forces of very strong economic data and worries about German politics. Then, at lunchtime, the ECB released its usually bland account of the last monetary policy meeting of the Governing Council. Buried deep in the report, the ECB dropped the bombshell on to financial markets that it was considering changing its guidance to markets about future monetary policy. As it quickly dawned on investors what the implications of this would be, EUR/USD immediately surged to USD1.2040, where it closed in New York.

This morning in Europe, the EUR as had another leg higher, almost reaching 1.2130; the highest in just over 3 years. We have to go all the way back to December 2014 to find the last time the EUR was at this level. One of the great ironies of this dramatic correction higher in the external value of the euro was the sentence in the ECB’s account of the December Council Meeting that, “It was suggested that the Governing Council’s communication should be adjusted gradually over time to avoid sudden and unwarranted movements in financial conditions.” Oftentimes, after a sharp move in either foreign exchange or currency markets, the ECB does an off-the-record briefing with select journalists to attempt to halt or even reverse what it might see as an unwelcome development.

These are often referred to in the professional market as “ECB sources” stories as they are always anonymous with no names attributed to them. The main feature of this morning’ trading in Europe is that there has been no such push-back. Eurozone money markets now price in a 70% chance of a 10bp rate hike by year-end; up from around 50% at the beginning of the week.

The EUR opens in North America this Thursday morning at USD1.2125 and EUR/CAD1.5185.


British Pound

GBP/USD expected range: 1.3530 – 1.3750 

The GBP had a classic day of two halves on Thursday; weak in the morning after the publication of the BoE Credit Conditions Survey but then rallying hard against the USD – but not the AUD, NZD or EUR – during the London afternoon. The pound hit a fresh 2018 low of 1.3461 just before the ECB lit a fire under the EUR but by the close of business in Europe it had gained more than three quarters of a cent to a high of 1.3547.

This morning in Europe it has added another full cent to reach 1.3640; a fresh high for 2018 and the strongest since the day after the EU referendum back in June 2016. Three of the UK’s biggest retailers this week delivered disappointing Christmas figures as weak consumer confidence and aggressive discounting from online retailers hit sales. Retailers are trapped in a profit squeeze as the past devaluation of sterling pushes up the cost of sourcing products at a time when real disposable incomes are shrinking.

Next week we’ll get to see the latest figures on UK inflation on Tuesday and the official retail sales numbers on Friday. Though the pound’s rally against the US Dollar over the past 24 has certainly been impressive, it has still lagged the EUR with GBP/EUR at one point this morning falling to within 10 pips of making a fresh low for 2018. After a 160 pip rise today, GBP/AUD is still only back to where it was on Monday whilst GBP/NZD is only back to Wednesday’s levels.

The British Pound opens in North America this morning at USD1.3630, CAD1.7065 and AUD1.7310.


Australian Dollar

AUD/USD expected range: 0.7820 – 0.7895 

AUD/USD rose more than 40 pips on Thursday but could still only make it to third place on the one-day performance table behind the NZD (yet again!) and the EUR. After an early boost locally from retail sales figures, it then traded pretty much sideways until late in the New York afternoon when it reached a fresh 14-week high of 0.7895; the best since late September.

Overnight in Asia it marginally extended these gains to just a couple of pips below 79 cents before slipping a little in the European morning. The AUD was quite resilient in the face of latest Chinese trade data which showed a big slowing of imports last month. China’s exports for the full year rose 7.9%, the fastest rate since 2013, while imports gained 15.9%, the best since 2011. For December, however, exports rose 10.9% from a year earlier, beating analysts’ forecast of a 9.1% increase whilst imports grew at a slower pace of 4.5%. That left the country with a trade surplus of $54 billion for the month, the highest since January 2016.

As well as the strength of domestic economic data the AUD has also been given a boost from higher gold prices. The yellow metal is up $14 per ounce over the past 24 hours to $1331; the highest since September 14th 2017, whilst silver, platinum and aluminium have all registered gains. AUD/USD hasn’t been on a US 80 cents big figure since September 20th but given the foreign exchange market’s love of round numbers, this is the level which will be increasingly talked about now.

The AUD opens in North America this morning at USD0.7870 with AUD/CAD at 0.9860 and AUD/NZD1.0850.


New Zealand Dollar

NZD/USD expected range: 0.7200 – 0.7295 

At the risk of repeating ourselves, the New Zealand Dollar was again top of the one-day performance table on Thursday and has now occupied this spot for five of the past six trading days. This time, however, it had to share the honors with the euro. The Kiwi reached a high in the New York afternoon of USD0.7255; the highest since September 26th when it was just beginning its post-Election slide all the way down to 0.6800 in late November.

Overnight in Asia it extended gains to 0.7270 but has subsequently slipped around 20 pips during the European morning. Given that the remarkable rally in the NZD has come without the support of any fresh incoming economic news (apart from Wednesday’s QV house prices), November building permits data were never likely to be a big market mover. Nonetheless, Statistics New Zealand always provide a fascinating amount of detail in their economic releases and they are an endless source of information and entertainment for your author.

We know that not only did November’s numbers show an 11% m/m increase after 10% drop in October, but that within the total of 3,262 new dwellings there were 1,870 houses, 577 townhouses, flats, and units (the highest number on record), 272 retirement village units and 543 apartments (a 9-year high). Wouldn’t it be nice if official statisticians elsewhere provided such detail and color in their often very dull Press Releases.

The New Zealand Dollar opens this morning in North America at USD0.7255 with NZD/CAD at 0.9085.

Posted by OFX