Foreign Exchange Solutions



Are you keeping your fingers crossed, hoping that the foreign exchange rates improve or stay the same for the next few months?

Selling your condo in Arizona? Do you have business imports or exports to be paid in a foreign currency? Planning on spending next winter in California?

You already know that we can facilitate your foreign exchange transactions at very low spreads, but you may not know that CIBC Wood Gundy is the only Canadian brokerage firm to offer FX forwards, allowing our clients to purchase or sell currency for a future settlement date, at an agreed upon exchange rate.

The benefits to you:

  • Mitigates foreign exchange risk by locking in rates in advance.
  • Forward contracts are customizable to specific dates.
  • You can tailor the amounts for each forward contract to suit your needs (minimum US$100,000 equivalent).
  • Forward contracts are available for major currency pairs (CAD, USD, GBP, EUR, CHF, AUD, NZD, JPY). The denominator must be in CAD or USD.
  • No cash is exchanged until settlement date.

Suggested opportunities:

  • Hedge USD Equity Portfolio to mitigate foreign exchange volatility or to lock in current FX exchange gains on an investment account.
  • Sale of real estate in the U.S. in approximately six months, and if you want to lock in current inflated USD exchange rates to protect the Canadian cash equivalent for the purchase. If you sell your home sooner, you can settle the contract earlier through a swap and if it takes longer, you can roll the forward to an extended date.
  • Buy a USD forward swap due in four months to protect against a rising U.S. dollar to fund the purchase of farm equipment from the United States.
  • USD Denominated Dual Currency Transactions (DCT) can be used when an investor has USD holdings and is comfortable being converted to CAD at current levels. Investors can accept a coupon interest rate in exchange for the risk of being converted to CAD, if the USD appreciates above the level set in the contract.
  • Instead of borrowing money for short-term foreign transactions, enter into two swaps dated for the initial date when foreign currency is needed and a second for the date when the funds will be returned to Canada. Using your Canadian funds as security, you will not need to borrow from your margin account by using the forward contracts instead.

Let us know your needs and we will design a solution. Please feel free to call me to discuss options and current rates, with no obligation, at 1 (800) 798-0044.

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  1. June 2015 Client Letter - SolinvestSolinvest - June 4, 2015

    […] You already know that we can facilitate your foreign exchange transactions at very low spreads, but you may not know that CIBC Wood Gundy is the only Canadian brokerage firm to offer FX forwards, allowing our clients to purchase or sell currency for a future settlement date, at an agreed upon exchange rate. Read more… […]

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