Five major currencies dominate the worlds Forex market, these being the U.S. dollar, the euro, the British pound, the Swiss franc and the Japanese yen. A broader definition for the major currencies includes the Canadian, Australian and the New Zealand dollar, also called minor currencies. Trading in these currency pairs represents the bulk part of all Forex trade but there are many more currencies traded on different Forex platforms.
Some currencies lack liquidity and market depth; hence, they are traded at low volumes and often possess low value compared to the major currencies. These currencies are referred to as exotic currencies. In a broader sense, an exotic currency could also mean a currency, which is not weak but rather unpopular; the Kuwaiti dinar is the strongest currency in the world in terms of value but it is not popular outside Kuwait.
If you consider conducting a currency transfer in an exotic currency, you definitely must consult an expert in the field. Not many dealers dare trade in such currencies and even fewer will offer you a favourable rate for transferring money in, say, Uruguayan peso. Moreover, the lack of liquidity means that the exchange rates will not be in your favour if you decide to deal with such a currency by yourself. A good example is the Russian rouble, which is backed by a huge economy and a vast market and should be a very stable one at first glance. However, not so long ago it was demonstrating fluctuations that even most experienced Forex traders found hard to predict because of some political uncertainties. Hence, taking a closer look at a particular exotic currency is always of great help before sending money, which one will have to withdraw after conversion into this currency.
Some currencies not only lack liquidity on the Forex market but are highly volatile, too, making it even harder to forecast their movement against particular counterparts. An experienced dealer with an expertise in currency transfers as well can prepare a plan for you if you intend to send money abroad regularly. The dealers use advanced software tools to keep a close watch on the market and to analyse market trends; therefore, they are able to select the right moment for sending your currency transfer at the most advantageous foreign currency market exchange rate.
As a rule, the best way to send money is if the recipient possesses a bank or non-bank account in the same currency as your home currency, a U.S. dollar account, for instance. All too often, this is not possible when you deal with exotic currencies or the cost of opening an account in another currency is too high, and then you should look for expert help. The lack of knowledge about the specifics of an exotic currency is not an excuse for not exerting efforts and provided you have a good currency consultant next to you, you can take advantage even from a currency transfer denominated in the most exotic currency in the world.
Dr Timothy Ross is an expert on the financial markets. Recommendation: If you need to make a large or regular overseas payment consider the help of a currency transfer specialist as an alternative to your bank.