$--> is losing me thousands

you'll have trouble opening a US account without a social security number. However, you can get a US dollar account with a number of UK offshore banks, HSBC and Nationwide spring to mind.

you can put your money in there until the exchange rate improves but given the current US fiscal policy, you'll be waiting a while.

You are not losing anything in the conversion. You are losing because the exchange rate has turned against you and you failed to hedge the risk of signing a contract denominated in dollars.

You can, if you like, open a US$ bank account. You might as well do that in Britain. But you will still be speculating on a recovery in the exchange rate, something that is doubtful given the Bush administration's penchant for deficit spending and funding that spending by selling Treasury bonds in foreign markets.

You have already lost. Make the best of the situation and do not assume you can bet against the trend.

In message , luke writes

Opening a US$ account will only work if the rate moves in your favour, whenever that may be if at all.

You could buy a forward currency contract with your bank when you enter into the contract with your US clients, so as to fix the exchange rate, but this will cost you money which you should build into your price.

OR you could invoice in sterling and pass the risk to your clients.

What are your bank charges like? I get charged by the company who deals with it and then my bank add on some money too.

Assuming it is a bit of money you could always hedge your FX using futures or forward contracts however for smaller amounts the costs will probably outweigh the benefits.

Speak to your bank manager who should be able to point you in the right direction and give you an idea of charges for the amounts that you are talking about.