I have been wanting to have a little more money invested in Australia and New Zealand - the objective is to have enough assets allocated to AU/NZ to effectively pay for the accommodation and other living costs incurred should I choose to spend two or three months a year in those countries.
With both currencies having weakened considerably in recent weeks (thanks Greece/Euro zone politicians), I've decided to move some money offshore. Rather than simply convert and remit, I entered into a forward contract to try and profit from the current market volatility.
Here are the details:
Expiry date: 29 May, 2012
Fixing date: 25 May, 2012
Spot rate: 7.6560
Conversion rate: 7.600
If the AUD is at or below 7.600 on 25 May, I will be buying AUD at an effective exchange rate of 6.585. If the AUD is above 7.600, I will pocket the premium which is about what I would earn on the sum in question over a 12 month period (because the bank deposit rates are so low).