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rates - in foreign currency
Thread poster: Brenda Wong, M.A. (Translation & Interpretation)
Brenda Wong, M.A. (Translation & Interpretation)  Identity Verified
Local time: 22:11
Member (2002)
English to Chinese
+ ...
Dec 3, 2001

I am a US base translator. Recently, I was contacted by an overseas agency who insisted that the rate for a translation project be in their currency. I am concerned about the exchange rate fluctuations between US$ and their currency. (They would pay me in US$ though). Are there any colleagues out there with a similar experience and who can share their experiences with me? I really appreciate it.

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Ralf Lemster  Identity Verified
Germany
Local time: 07:11
English to German
+ ...
Exchange rate risk... Dec 3, 2001

...is a fact of life in international business, I\'m afraid. In essence, the distribution of risks reflects the balance of power in a business relationship: if the (prospective) customer is powerful enough to force you to accept their base currency, it simply means that they offload their exchange rate risk (which they would be subject to if you invoiced on a pure USD basis).

Of course, you can hedge foreign exchange (FX) risk - but in my experience (including FX trading, but this was many years ago...) this would only make sense if you had a minimum volume of, say, US$ 50,000 (or equivalent).

I suggest something like this: have a look at the exchange rate development of US$ vs. the currency concerned (CNNfn.com or even Yahoo should hold historical data) to find out your worst case (the danger, from your perspective, is a strengthening of the US$ - equivalent to a weakening foreign currency). Use this \"worst case rate\" to find out what price (in US$ terms) you would achieve in the event of a most unfavourable movement. This might well be less than you\'d find acceptable - but now it\'s an educated business decision, rather than guesswork.


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Werner George Patels, M.A., C.Tran.(ATIO)
Local time: 01:11
German to English
+ ...
Good explanation, Ralf Dec 3, 2001

Looking at historical data on exchange rates may be a bit too much, though. As a translator, you would expect to get paid within 30 days, and most currencies do not fluctuate too much within 30 days - it might be a bit of a pinch, but overall it is not going to be too drastic.



Invoicing in foreign currencies is no problem: just take your usual rate in your local currency and calculate your rate in the other currency on the day you prepare your invoice (or on the day you accept the assignment). You can use such currency converters as www.xe.com/ucc/.



Good luck, \"pro\"!


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Ralf Lemster  Identity Verified
Germany
Local time: 07:11
English to German
+ ...
Beware of markets... Dec 3, 2001

Werner,

I tend to agree if we\'re talking about the major currency pairs, such as €/US$ (including the euro\'s legacy currencies, of course), sterling or swiss francs. Things get more interesting if the \"overseas agency\" *pro* referred to happens to be in Turkey, Asia or Central/Eastern Europe... things can quickly get painful with these currencies. Don\'t get me wrong: I don\'t want to cry \"wolf\", but there are real risks out there - not just since 11 Sep, but certainly more so than ever.



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Werner George Patels, M.A., C.Tran.(ATIO)
Local time: 01:11
German to English
+ ...
I agree, Ralf, ... Dec 3, 2001

...it depends on the currency.



Let\'s keep our fingers crossed


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Brenda Wong, M.A. (Translation & Interpretation)  Identity Verified
Local time: 22:11
Member (2002)
English to Chinese
+ ...
TOPIC STARTER
Rates - in foreign currency Dec 3, 2001

Hi all colleagues who took the time to reply to my question:

It\'s my first time posting a question and I didn\'t expect to receive responses so quickly. Thanks everyone for your useful inputs and information!!! ^_^


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SusyZ  Identity Verified
Local time: 01:11
I would suggest checking the following site Dec 9, 2001

www.oanda.com and doing a history exchange rate for the last 90 days between the US Dollar and the country\'s currency you are dealing with. I would go as far as taking an average and then using that as a reference to propose my quote. Good luck!

Susy Zubradt


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jccantrell  Identity Verified
United States
Local time: 22:11
Member (2005)
German to English
+ ...
contract clause Dec 10, 2001

In line with accepting some risk with fluctuating currencies, has anyone ever put a clause in the contract stating what their rate is in, say, baht and USD and then specifying that the rate would be renegotiated if it changes by 10% or so?



This would not apply to a single contract (or it might, if the currency is THAT volatile) but I was thinking more of a blanket contract to cover work over the next year.



Any comments?



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