Let the exchange rates take you

July 24, 2013

 Have you ever noticed just how volatile international currencies are these days? They fluctuate wildly against one another on what seems to be the slightest bit of news. In fact, they’re by far the world’s most heavily traded and valuable markets and in an age were news really is 24/7 – they’re very jumpy indeed. But obviously, the foreign exchange markets are complex and there are people who really understand what’s going on and make millions in profits from trading them successfully – and then there are the rest of us who don’t!

But there’s one way you may be able to benefit from these wild mood swings in the comparable values of different countries’ currencies and that’s by letting those exchange rates dictate your international money transfer decisions – and take you where you want to go.

In other words, the markets can be your longer term travel guide. So, for example, if you live in the UK and the pound strengthens markedly against the Brazilian real or the Argentine peso you may decide to buy those currencies and to hold them for future travel to those countries.

Of course, there’s a danger here; the pound may strengthen further still and you’ll have “lost” on your trade. But as long as you know enough about the countries to be happy with the relative value decision you’ve taken, then it’s not the end of the world and if you can afford it, you could buy more still to make future travel cheaper yet. On the other hand, if the opposite happens and the pound weakens against those currencies, you may decide simply to reverse the trade and pocket the difference.

This isn’t a completely fool-proof strategy and you should never change more than you can afford of course – but it can certainly be a fun way of letting exchange rates dictate your future travel plans on a value first type basis.