Case Study - Kelly's story

Kelly's details:

Age: 27

Occupation: IT Consultant

Situation:  Kelly lives in Paris and recently inherited £100,000 from a relative in the UK. The funds will not be paid out for six months and Kelly would like to receive the money in euro.

How we helped Kelly

• The exchange rate from sterling to euro when Kelly heard about the inheritance was 0.6650, a 2 year high. Kelly was worried that the rate might fall by the time she received her money.
• Kelly telephoned her Relationship Manager. A forward contract was set up fixing the rate at 0.6667 for the exchange.
• When the funds were finally received the euro exchange rate had slipped to 0.6897. If Kelly had not arranged a forward contract she would have only received €146,000 instead of €150,000, a potential loss of €4,000.

For more information on how we could minimise your foreign exchange risk, call +44 1534 616 162

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Once an exchange rate has been booked it is fixed and if you do not proceed with the transaction, you will be liable for any loss incurred to reverse the transaction.

You should be aware of the potential risk of investing in a currency which is not your base currency and the effect any change in exchange rates may have, be it up or down, when converting your returns back to your base currency. The underlying investments may be made in local currencies which are subject to exchange rate fluctuations when converting returns back to the base currency.