Maybe this is something that sounds familiar: you’ve ordered something abroad on account. However, when the parcel arrives two months later, your joy is only short-lived. When you come to pay in the foreign currency, you notice the rate has taken an unfavourable turn, and the product is now more expensive than you initially assumed. If you want to avoid such a nasty surprise in future, it may be worth purchasing and selling foreign currencies. We clarify the most important questions about foreign exchange transactions and give tips on how to buy and sell currencies independently.

How do foreign exchange transactions work in principle?

A foreign currency transaction is when currencies are bought and sold, and the value ratio between two currencies, i.e. the exchange rate, plays a critical role. As exchange rates are subject to fluctuations, the price of a currency will vary depending on the market situation. A person buying and selling foreign currencies will try to harness these ups and downs in exchange rates to their own financial advantage.

Useful to know: why do we use the term “currency pairs”?

In foreign exchange trading, currencies are always traded in pairs. If you buy a foreign currency, you are simultaneously selling the other foreign currency in the currency pair. When it comes to the price of a currency, we always look at currency pairs. The exchange rate therefore refers to the price of a currency unit (e.g. 1 euro) expressed in another currency (e.g. pound sterling). With PostFinance, you can trade in these nine foreign currencies: Australian dollar, Canadian dollar, Danish krone, euro, pound sterling, Japanese yen, Norwegian krone, Swedish krona, US dollar and Swiss franc. This amounts to a total of 45 currency pairs – for instance EUR and CHF, EUR and USD and so on.

Why might it be a good idea for you to purchase and sell foreign currencies as a private individual?

Let’s assume you already know today that you will be going abroad in a few months time, or that you will make spur-of-the-moment purchases in euros from time to time. This leaves you two options: either you can purchase the currency in one go when you need it – or you could purchase the currency beforehand when the exchange rate is favourable in one or several tranches, and keep this cheap money in your foreign currency account for later spending. In the second instance, you won’t be caught off guard by unfavourable exchange rates, and you can plan out your expenses. If you’re worried about the foreign currency declining in value, you can resell it at any point. As a general rule, it’s handy to have a bit of cash in a foreign currency.

When should you purchase or sell foreign currencies?

The decision as to when to purchase or sell foreign currencies is guided by this general principle: buy when the foreign currency is low in price or when an increase in price is expected; sell when the foreign currency is high in price or when a drop in price is expected.

How can you purchase and sell foreign currencies independently as a private individual?

PostFinance allows you to purchase or sell foreign currencies in e-finance, in the PostFinance App or over the phone on 058 667 07 00 – and at real-time rates. To do so, you need to have a foreign currency account in the relevant currency.

Want to purchase or sell foreign currencies in e-finance or the PostFinance App independently? To do this, simply go to the tile “Purchase/sell foreign currency” in your account. In order to complete a foreign currency transaction on day X, you have three options with different rates to choose from:

• The amount is debited or credited to your accounts on the same day
• The amount is debited or credited to your accounts on the next banking day
• The amount is debited or credited to your accounts on the banking day after next