HIFX plc

Mar 17 2007, 12:12 AM

Over the last few months, the Australian dollar has been pretty stable trading between GBP v AU$ 2.45 and 2.55 since August 2006, however GBP v AU$ has now fallen below 2.45. This stability was because of robust commodity prices (oil and gold) and a cycle of tightening monetary policy by the Reserve Bank of Australia, who have raised interest rates eight times to 6.25% since 2001.

This attracted many overseas investors to swap low yielding currencies to take the benefit of higher yielding currencies i.e. exchanging Japanese yen for Australian dollars and benefiting from a much higher interest rate in Australia.

The latest inflation figures from Australia suggest that the increase in interest rates have had the desired effect on inflation, with CPI falling to 0.1% in quarter 4 of 2006.

As there are so many factors that affect the currency markets, it is imperative that migrants begin to plan for their migration as soon as possible because ultimately the exchange rate they achieve will have the biggest impact on their future wealth and purchasing power when it comes to buying a house.

Protecting yourself from currency movements, even before you have sold your property is straightforward with HIFX, the migration currency specialists, with a “forward contract”. A forward contract involves putting down a 10% deposit to secure a rate of exchange until you need the currency when you can pay the balance of 90%. This way of buying currency is flexible and can accommodate changes in the time scale originally agreed – due to house sales falling through for example.

If you have more funds then you anticipated because of an increase in your house price during the forward contract, you can transfer these on a “spot contract”. Essentially, this means that you “buy now, pay now”, but because it is likely to be a smaller amount than the forward contract there is less risk associated with it.

Being able to make the right decision based on your individual circumstances is something that the migration team at HIFX has a huge experience of. Your dedicated dealer will be able to implement a tailored strategy, free of charge, to help you manage your requirements in the most effective way possible.

You can contact the Migration team on 01753 859 169 or email: migration@hifx.co.uk. Alternatively, visit the website: www.hifx.co.uk/migration