How to protect your USD income during year-end currency changes

The end of the year is usually fraught with currency fluctuations. It is one of the most volatile periods in the currency markets, due to holiday spending, reduced trading volume, and companies working through their balance sheets. It is important to protect your USD income to avoid losses from year-end currency fluctuations. This article explains how you can protect your USD income during this period.

Also read: Freelancer's guide to handling currency fluctuations

Invoice in USD

Why worry much about year-end currency changes when you can easily shift the burden? The simplest way to shift exchange rate risk is to price all your goods and services in US dollars. This transfers the risk to your international customers or clients.

Hold earnings in USD

Keeping your income in USD until you need to spend it is often the smartest defensive move. If you have a USD account, you can wait for favourable rates instead of being forced to convert immediately. This is where multi-currency accounts on platforms like Grey are especially useful, and they also allow you to spend directly in USD.

Also read: Best USD savings accounts for freelancers and remote workers

Avoid converting all your USD at once

One of the most common mistakes is converting a large sum of USD income into a single transaction. If the exchange rate is unfavourable on that day, you will be losing a lot of money. It is better to convert smaller amounts over several weeks to smooth out currency fluctuations and reduce exposure to short-term volatility. This strategy is particularly effective when rates are unpredictable, like in December.

Convert when you need to

Instead of following your emotions, convert based on actual needs. If your rent, bills, or planned expenses fall in January or February, there may be no urgency to convert everything in December. Ensure there is a genuine reason or expenses for converting to avoid impulsive decisions and panic conversions that can lead to losses. It also makes budgeting more straightforward because every conversion is accounted for.

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Diversify your portfolio

Putting all your eggs in one basket can be tricky, especially with the year-end currency changes. Diversifying your assets helps you reduce the risk and loss. Put your money into low-risk investments that yield enough to hedge against currency fluctuations.

Use cards and payment services offering good rates

When spending directly from your USD balance, ensure your card provider uses mid-market rates without hidden markups. Also, avoid dynamic currency conversion and opt to pay in your local currency where available. Grey offers USD debit cards that make online payments more affordable and seamless.

Also read: How virtual cards can simplify your life abroad

Protecting your USD earnings with Grey

While you cannot control year-end currency volatility, you can protect your USD earnings. Using a Grey multi-currency account lets you manage USD, EUR, and GBP in one place and convert your USD income at competitive rates. This gives you greater control over your finances, even in the face of uncertainty. You can always hold your earnings in USD and convert when the rates are favourable. Grey also offers USD debit cards that allow you to spend directly in USD without worrying about conversion fees, especially with international payments.

Get started by signing up on Grey’s website or downloading the mobile app today to protect your earnings.

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