Are there ways to maximise foreign exchange?
Trying to maximise foreign exchange rates can prove a lot of hard work for very little outcome – unless you are dealing in hundreds of thousands of dollars.
And so finding the best rate to finance spending money for a trip can prove more trouble than it’s worth.
Getting 1c more on your exchange rate only translates to $10 if you are only converting $1000.
It’s not so much the exchange rate that you need to be concerned about but rather the commissions and hidden margins.
The mark-up can be up to 2 per cent for the more commonly traded currencies but then as much as 5 per cent for the more obscure ones.
There are ways to protect yourself from currency movements by locking in an exchange rate or ordering a currency conversion once a particular rate is reached.
Say you had a regular pension payment coming from the UK and wanted certainty of income, then you could lock in a forward exchange contract for 12 months. Of course should the rates then move in your favour, you will miss out as you will be locked in at the exchange rate you established.
Vrondas’ advice on maximising exchange rates is to be informed, read daily and weekly commentary, shop around and have an exchange rate in mind.