How to Get the Best Foreign Exchange Rates When Traveling Overseas

Research Market Rates Ahead-of-Time

There are many steps to getting the best foreign exchange rates when traveling overseas. It begins by doing your research. Check out online and printed material for foreign exchange, local economic conditions, and travel tips. If a local area is struggling economically, it may offer you better foreign exchange rates. Compare the local currency price over a year to see dramatically the currency exchange rate changes.

Exchange rate research will provide you with a solid reference point. People will be less likely to scam you when they realize that you are knowledgeable about foreign exchange rates. As you travel, continue to check the currency exchange rates in the newspapers or on the Internet.

Airports, ferries and trains

Airports, train stations, and ferries offer convenience, but usually have slightly higher foreign exchange rates. Another option is to check out the airport rates on the Internet; you can order the local currency online for a better rate and pick it up at the airport – combining convenience and price. Train stations and ferries will tend to have more limited hours of operations.

Banks

Exchanging your home currency for local currency before you travel is one viable option. In the country you visit, there will also be foreign exchange banks that serve individuals and businesses that need foreign exchange services.

Other Foreign Exchange Options

Some high-traffic tourist areas may have expensive foreign exchange rate services at smaller shops and larger stores.

Sometimes, hotels offer decent foreign exchange rates as a service to their customers. You could receive a money transfer while you are overseas; it is cheap, safe, and fast. The best foreign exchange rates can be found at banks and post offices. Gift cards or travelers checks are also options.

Some local exchange services charge up to 25% for currency exchange. Shop around, compare two to three rates before completing your foreign currency exchange transaction.

Foreign Exchange Brokerage

Foreign exchange brokerage firms buy contracts in large volumes at attractive rates. These highly-trained professionals are experts at trading international institutes. They usually offer better rates than banks, but also have higher fees.

Different Foreign Exchange Rates

You may run into a number of different rates: "official," "local," "market," "buy," and "sell." Be careful, some shops will quote one rate to attract your attention, then they will tell you that you only qualify for the higher rate.

When there is a "local" foreign exchange rate that is different from the government's "official" rate, you can usually get a better deal. Some good rates only apply when large amounts are replaced.

Credit Cards

Going through a bank for the foreign exchange rate can offer the best rates and lowest fees. When consumers use a debit or credit card, their banks will give them the same foreign exchange rate that banks charge each other. Some banks and credit card companies will charge fees of up to 3% on all purchases made with the currency.

Before you travel, do your research into your financial institution's most current policies, rates, and fees for exchanging foreign currency.

Some travelers purchase a debit card, special credit card or cash passport for voyages overseas with low or no fees on foreign exchange. These are safer than cash. Be careful, because these cards have special rules.

You can avoid some ATM fees by using your credit or debit card for large purchases – housing, travel and food.

Additional Fees

Many additional fees could be charged when you use a credit card overseas:

1. Foreign exchange "load" fee (currency conversion fee) 2. Cash withdrawal fee 3. Interest charge on balance 4. Handling fee.

There might be other commissions, surcharges, and fees that may apply. Flat rates and minimum amount restrictions may also apply. Calculate the net foreign exchange rate after all transactions are added. Be careful of "commission-free" offers because they will usually provide a less competitive exchange rate.

Beware of "dynamic currency conversion," promises; venders will offer to charge your fees denominated in your home currency, the AUD, while you are in the in the foreign country. This might sound good, but the fees are usually excessively high. When in a new locale, you should get used to pricing everything in the local currency.

ATM

Automated Teller Machine (ATM) networks have grown worldwide. If you have an account with a major bank that is part of an extensive network, then you might be able to withdraw the local currency from the ATM wherever you go. This will allow the bank at home to perform the conversion.

The money you withdrawal will be in the local currency. It is wise to withdraw larger lump sums because there might be 1 to 3% ATM fee charged. There may also be a "daily withdrawal limit."

You could check out ATM, credit card, or airline websites to see if their facilities are available where you go. There are frequently affiliations, combinations and links to large networks of financial services between these groups – for example, the American Express Qantas credit card.

Discuss all relevant rates and policies with your bank before you travel.

Exchange Rate Calculator

The Exchange Rate Calculator will help you calculate the "most competitive market rates" by finding the mid-point between buy and sell rates for large transactions. Exchange rates can change quickly.

Having a small calculator can help you figure the exchange rate; it will also make you look more serious to others. You can also go onto the World Wide Web to find an Exchange Rate Calculator.

Tips for Getting the Best Foreign Exchange Rates When Traveling

Getting a small amount of the local currency before you travel makes sense since the local airport, bank, or exchange service may be closed when you arrive. You may need an emergency cash source for purchasing something en route: a snack, umbrella, or taxi ride.

Plan your budget ahead-of-time. Large cities will offer more options for foreign currency exchange. You will probably need to carry some local currency to smaller towns due to fewer foreign exchange options. Avoid exorbitant fees by planning ahead.

Local taxi drivers and hotel employees may know the best places for foreign exchange. If you must exchange one currency for another overseas, make sure you have a well-known currency that will be accepted in the locality you are visiting. Sometimes, wise locations may prefer to actually hold your well-recognized, "more convertible," AUD rather than less-popular local currencies; they might give you a better rate.

Some treaties are not very valuable compared to your higher denominations of AUD. You might be required to bring a small bag to carry the local currency after exchange. Most countries still permit haggling, so show confidence and be patient.

Trust Your Instincts

Beware of black market moneychangers who might be involved in a number of scams, including counterfeiting, theft and shorting you money. They probably will not expect you to count out large amounts of bills. Also, some local banks are crooked; they might think that you will travel before you realize that they have not exchanged the correct amount of money.

If you feel something is not right, you are probably correct – trust your instincts.



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All About Forex Currency Converters

A currency converter is a very handy tool not only for Forex world but as well as daily life. When you travel, order goods over internet it's necessary to find current value of foreign currency. Many of these currency converters can be found on the internet but most of them are delivered only with advertisement of the company, like broker house or travel agency who, provide this kind of tool.

What are the types of currency converters?

There are many types of currency converters online. The types different by their intended purposes and the information they give. Choosing the right converter depends on what you really need from it. Below are some of the useful converters that you have to choose from.

  • The short list converter: This converter is used for conversions of the most-used contexts in the world. Note that there are over 100 treaties in use worldwide. In the short list converter, only the major departments are reflected, so this converter is best for international traders since all treaties are not frequently traded.
  • The second converter is the long form currency converter: This converter is just like the latter except that it has up to 50, maybe more, treaties allowing for less popular currencies to be converted as well. This converter is a bit cumbersome and unnecessarily costlessly unless you have to deal with a large collection of different treaties.
  • The cross rates currency converter: This type of converter is the easiest and fastest to use. The converter has treaties matched against each other and their rates as well. It also allows setting a base rate where one can set a particular currency, take for example the Dollar and then the other currencies are all compared to it. The limit is that it only displays the major currencies. Other websites offer as many as 20 treaties.

How converters work .

Currency converters gather information over the internet. Some are in the form of software that can be downloaded and installed onto computer; therefore, they need an internet connection in order to give accurate information since currency values ​​constantly fluctuate against each other. To save himself or herself from the hassle of downloading and installing this software, the trader can simply use the pre-installed currency converters on websites like the ones from the Forex website which provide reliable exchange rates.

For website owners and bloggers, having currency converter services on your pages is a good idea, especially if your site is a financial website. There are many websites offering converters at different prices, but. Forex offers these tools for free. Forex offers many Forex resources such as displaying the current foreign exchange rates, various Forex charts, swap history, economic calendar, pip value calculator, currency converter and margin calculator which can be installed on anyone's website all at no cost.



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How to Determine an Exchange Rate

An exchange rate is the cost for exchanging one currency for another. Exchange rates oscillate regularly throughout the week since currencies are being actively traded. That makes the price go up and down. The price for a currency on the market differs from the rate you will get from your bank when you exchange currency.

Market Exchange Rates

Traders and companies buy and sell currencies around-the-clock during the week. In order for a trade to take place, a currency must be exchanged for another. For example to buy British Pounds (GBP), another currency must be used to buy it. Regardless of what currency will be used a currency pair will be created. If U.S. dollars (USD) are used to buy GBP, then the exchange rate is for the GBP/USD pair.

Understanding an Exchange Rate

If the exchange rate for the USD/CAD pair is 1.0950, that means one U.S. dollar costs 1.0950 Canadian dollars. The first currency in a pair always stands for one unit of that currency. The exchange rate shows how much of the second currency is necessary to buy one unit of the first currency. In other words, this rate tells you how much it costs to purchase one U.S. dollar using Canadian dollars.

In order to figure out how much it costs to buy one Canadian dollar using U.S. dollars the following formula should be used: 1/exc. rate. In this case the position of currencies will switch (CAD/USD).

Conversion Spreads

When people go to the bank to exchange currencies, it is most likely that they won’t get the market price that traders get. This is because the bank will markup the price to make a profit. If the USD/CAD rate is 1.0950, the market will say that to buy one U.S. dollar it costs 1.0950 Canadian dollars. However the bank says it may cost 1.12 Canadian dollars. This difference represents the profit. If you need to calculate the percentage discrepancy, take the difference between the two exchange rates and divide it by the market exchange rate as follows: 1.12 – 1.0950 = 0.025/1.0950 = 0.023.

Currency exchanges and banks compensate themselves for this service. The bank offers cash, while traders do not deal in cash in the market. To get cash, processing, wire or withdrawal fees will be applied to a forex account. For most people who are looking for currency conversion, getting cash momentarily and without fees, but paying a markup, is a reasonable compromise.

Determine Your Needs

If you need a foreign currency, you should use exch. rates to calculate how much foreign currency you need as well as how much of your local currency you will need to purchase it.

If speaking about Europe, you will need euros (EUR) and will need to check the EUR/USD rate at your bank. The market rate can be 1.3330, but an exchange house can charge you 1.35 or more.



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Currency Converter – The Essential Service for Forex Traders

Currency converters are programs which are available online for everyone to use but, what exactly are they and how do they assist you? A currency converter is the online live program converter that calculates or specifics how much one currency is worth relative to another currency. For example you may be interested in how many New Zealand dollars it will take to buy one Australian dollar this currency converter can do the calculation easily for you.

Foreign currency exchange rates (Forex for short) are the rates recently traded between the country's currency and another country's currency. These are live converters and they constantly change as traders buy and sell currencies and supply and demand increases or decreases, impacting the bid and selling rates. With the currency converters you can easily compare the conversion rates by searching on the internet under currency exchange rate converter and Australia or US dollar or any other currency you are interested in. Most online Forex site have currency converters conveniently located in them.

If you are able to watch the currency converters regularly you can tack when the best exchange rates are to get the best rates. It may be wise to observe the average the high and the low for the day / week etc so as to know in what range your contracts have been trading. In this way you have a limited understanding to be able to predict where the treaties are heading. At the end of the day no one can predict the future but these statistics give us an indication of the 'anticipated' direction.

With so many options for obtaining foreign currency it may be useful to look at some of the terms more commonly referred to in the trading terms.

Forex rates are the rates commonly traded between all major country's treaties. These are subject to change regularly as the trader buy and sell more or less of the currents and the general supply and demand increases or decreases. Conversion rates are quoted regularly as online as the buys and sellers bid to negotiate buying / selling rates. You can easily compare the conversion rates and watch the monthly rates to see when your rate drops or climbs so as to decide when to buy. Just search on the internet for currency exchange rates of the currency you are tracking. There are also online money converters which can use the current exchange rate to convert your currency into the foreign exchange currency equivalent.

As long as you are able to prove that you have a valid reason for the foreign currency banks are allowed to sell the foreign currency to you. Bank currency exchange rates are the rates that the banks will buy and sell physical treaties to their customers. Obviously they add on commissions and charges for acting as the middle man do the rate may be a few cents more than the exchange rate quoted. As another safe option you may choose Travelers checks (a form of travel cash or travel currency). These are checks made out in the foreign currency which are effectively purchased in your local country but can be redeemed overseas. The benefit is that they are protected so if you lose the checks then the bank will issue you new checks as opposed to losing the physical currency which would be a disaster!



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Forex Trading – The Determinants of Exchange Rates

Currencies' trading involves trillion of US dollars everyday. Currency exchange transactions are facilitated by banks and financial institutions. There are lots of factors which can decide or influence the changes of exchange rates. These factors can be categorized under market forces and government intervention.

Dual forces of Supply and Demand

The exchange rates are impact by the economic events affecting the supply and demand for currencies. First, trade flow between countries reflects the demand of goods and services for a country which also indicates the demand for the country currency to conduct trade.

Second, government policy such as tax policy, labor law and tariff may influence the changes in supply and demand for currency.

Third, other economic conditions such war, political instability and a real price "shock" will affect forex too. An example of a real price "shock" is the increase of oil price drastically. Therefore, changes in any of these real economic factors will cause the supply and demand for currency value to shift and affects the exchange rates.

Government Intervention

Government can influence changes intentionally and unintentionally. Government can intervene in currency market through Central Bank buying or selling home currency in exchange of its foreign currency reserves. Government fiscal and monetary policy may unintentionally trigger the movement in forex market.

Type of Exchange Rate Regimes

There are 3 types of exchange rates regimes: fixed exchange rate, free float and managed float. In fixed exchange rate, the government decides a fixed exchange rate and the system allows trade activities during volatile market situation as uncertainty and risk are minimized. However, continuous monitoring required government to set away reserves. In free float system, forces of supply and demand determined the exchange rate and do not require government intervention. This system invites speculation that is volatile and unstable. In managed float system, government intervene to ensure the exchange rate remain within a specified range. Central Bank will buy or sell home currency to ensure the exchange rate is within an allowed floating range.

In the short run, government fiscal policy and monetary policy may affect the dual forces of supply and demand thus determined the exchange rates. However, no policy can overtake market forces in the long run.



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