These are attractive rates by any standards (the £/$ exchange rate has not hit $2 to the £ since 1992), but you have to weigh that against the risk of Crown going out of business (unlikely I would have to say as
their risk is zero), together with the return you could achieve on your funds in the meantime.
To address an earlier post, there is no
risk in forward exchange. On the contrary, Forward Exchange
eliminates risk. That is the
whole point of buying forward. You
know what rate you will achieve, so absolutely, categorically,
no risk. What you can not guarantee is that the rate might not move in your favour. That is, you don't know you will get the very best rate possible, just that the rate can't move against you. As I said in another recent post, this is not about gambling, it's about certainty. Certainty = no risk. At the risk (
) of repeating myself, this is a
very simple concept that is, without doubt, surprisingly difficult to grasp. I've worked for a major UK Bank for 26 years and I still struggle to get this across to some colleagues.
The premise is precisely the same as fixing a mortgage rate. Sure, the rate
might drop and you will then be paying more per month than you would have been had you opted for a variable rate. But, you guarantee, for the fixed rate period, that your monthly repayments won't increase. So, if you fix your rate for 5 years, you know how much your monthly repayments will be for 5 years. No guarantee that you might not end up paying more than if you did not fix, but an absolute, cast iron, guarantee that you won't pay more. No risk.
