‘Should I convert the money now, or do I wait?‘
If you’ve ever needed to pay an international supplier, or got paid in foreign currency, it’s a question you’ve likely spent a fair amount of time considering.
And, to date, the only way to decide was to keep a close eye on the exchange rate, and make an educated guess based on market trends.
Not anymore.
X-Hedge’s Limit Orders functionality takes the stress, guesswork, and manual effort out of the process. Pick your preferred exchange rate, and X-Hedge automatically makes the conversion when the market rate is equal to it (or better).
No manual tracking necessary: How Limit Orders work
X-Hedge’s Limit Orders functionality lets you schedule a conversion in advance.
Pick a target exchange rate, and X-Hedge will monitor the market for up to 15 months, making the conversion automatically when the exchange rate is equal to or better than your target.
This:
Saves time (and stress)
There’s no need to have people continuously monitoring the exchange rate and trying to extrapolate whether it’s likely to go up or down.
Lowers risk
The conversion happens automatically, so you won’t miss your target rate, even if it’s only available for a few seconds.
Makes it easier to plan ahead
Because the conversion will only take place at your target rate (or better), you’ll have more visibility into your cash flow and can budget more accurately.
Limit Orders in action: Example
Say you’re an industrial manufacturer based in the UK. You’re planning to expand your operations, and, so, need to invest in new plant and machinery.
The specific piece of equipment you require is only available from the US, and costs $2 million.
At the current exchange rate, that’s around £1.6 million.
But if the Dollar were to weaken against the Pound even by just 10 pips — 0.0010 — you’d save £2,000.
X-Hedge’s Limit Orders functionality enables you to automate the conversion so it takes place when the exchange rate enables this saving:
- Pick your selling and buying currencies. In our example, the selling currency is GBP and the buying currency is USD
- Enter the buying and selling amounts, and your target rate
- That’s it. X-Hedge will carry out the conversion as soon as the market rate matches or is better than your target rate (unless you cancel the order or more than 15 months elapse).
When is Limit Orders useful?
Limit orders works well for non-urgent transactions, such as:
- Bills and invoices that aren’t due on receipt
- Incoming foreign currency payments you can afford to park until the market reaches your target rate
- Planned expenditure. The equipment in our example above is a case in point. Other examples include investing in property overseas or buying a supply of raw materials
Use limit orders to time your conversions so they shave money off your expenditure or add gains on top of your revenue.
Have regular, recurring payments or other types of foreign currency exposure?
Speak to an advisor for tailored guidance about which of our other products might be the best fit.
Over to you
Limit Orders currently support 34 currencies, including EUR/USD, GBP/USD, USD/CHF, USD/JPY, and other major currency pairs.
We also have several improvements and enhancements in the pipeline, including custom expiry dates, more rate configuration options, such as reverse ISO, and the ability to book a forward instead of executing a spot transaction. So watch this space.
In the meantime, why not try Limit Orders out for yourself and see how much you could save (or add to your bottom line)?
