Best of the Week
Most Popular
1. Dollargeddon - Gold Price to Soar Above $6,000 - P_Radomski_CFA
2.Is Gold Price On Verge Of A Bottom, See For Yourself - Chris_Vermeulen
3.Dow Stock Market Trend Forecast 2018 - Nadeem_Walayat
4.Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - P_Radomski_CFA
5.Why The Uranium Price Must Go Up - Richard_Mills
6.Dow Stock Market Trend Forecast 2018 - Video - Nadeem_Walayat
7.Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - GoldCore
8.More Signs That the Stock Market Will Rally Until 2019 - Troy_Bombardia
9.It's Time for A New Economic Strategy in Turkey - Steve_H_Hanke
10.Fiat Currency Inflation, And Collapse Insurance - Raymond_Matison
Last 7 days
China Is Building the World’s Largest Innovation Economy - 21st Sep 18
How Can New Companies Succeed in the Overcrowded Online Gambling Market? - 21st Sep 18
Golden Sunsets in the Land of U.S. Dollar Hegemony - 20th Sep 18
5 Things to Keep in Mind When Buying a Luxury Car in Dubai - 20th Sep 18
Gold Price Seasonal Trend Analysis - Video - 20th Sep 18
The Stealth Reason Why the Stock Market Keeps On Rising - 20th Sep 18
Sheffield School Applications Crisis Eased by New Secondary Schools Places - 20th Sep 18
Precious Metals Sector: It’s 2013 All Over Again - 19th Sep 18
US Dollar Head & Shoulders Triggered. What's Next? - 19th Sep 18
Prepare for the Stock Market’s Volatility to Increase - 19th Sep 18
The Beginning of the End of the Dollar - 19th Sep 18
Land Rover Discovery Sport 'Approved Used' Bad Paint Job - Inchcape Chester - 19th Sep 18
Are Technology and FANG Stocks Bottoming? - 18th Sep 18
Predictive Trading Model Suggests Falling Stock Prices During US Elections - 18th Sep 18
Lehman Brothers Financial Collapse - Ten Years Later - 18th Sep 18
Financial Crisis Markets Reality Check Now in Progress - 18th Sep 18
Gold’s Ultimate Confirmation - 18th Sep 18
Omanization: a 20-year Process to Fight Volatile Oil Prices  - 18th Sep 18
Sheffield Best Secondary Schools Rankings and Trend Trajectory for Applications 2018 - 18th Sep 18
Gold / US Dollar Inverse Correlation - 17th Sep 18
The Apple Story - Trump Tariffs Penalize US Multinationals - 17th Sep 18
Wall Street Created Financial Crash Catastrophe Ten Years Later - 17th Sep 18
Trade Wars Are Going To Crash This Stock Market - 17th Sep 18
Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - 17th Sep 18
Financial Markets Macro/Micro View: Waves and Cycles - 17th Sep 18
Stock Market Bulls Prevail – for Now! - 17th Sep 18
GBPUSD Set to Explode Higher - 17th Sep 18
The China Threat - Global Crisis Hot Spots & Pressure Points - 17th Sep 18 - Jim_Willie_CB
Silver's Relationship with Gold Reaching Historical Extremes - 16th Sep 18
Emerging Markets to Follow and Those to Avoid - 16th Sep 18
Investing - Look at the Facts to Find the Truth - 16th Sep 18
Gold Stocks Forced Capitulation - 15th Sep 18
Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - 15th Sep 18
Trading The Global Future - Bad Consequences - 15th Sep 18
Central Banks Have Gone Rogue, Putting Us All at Risk - 15th Sep 18
Gold Price Seasonal Trend Analysis - 14th Sep 18
Growing Number of Small Businesses Opening – and Closing – In the UK - 14th Sep 18
Gold Price Trend Analysis - Video - 14th Sep 18
Esports Is Exploding—Here’s 3 Best Stocks to Profit From - 13th Sep 18
The Four Steel Men Behind Trump’s Trade War - 13th Sep 18
How Trump Tariffs Could Double America’s Trade Losses - 13th Sep 18
Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - 13th Sep 18
Trading Cryptocurrencies: To Win, You Must Know Where You're Wrong - 13th Sep 18
Gold, Silver, and USD Index - Three Important “Nothings” - 13th Sep 18
Precious Metals Sector On a Long-term SELL Signal - 13th Sep 18
Does Gambling Regulation Work - A Case Study - 13th Sep 18
The Ritual Burial of the US Constitution - 12th Sep 18
Stock Market Final Probe Higher ... Then the PANIC! - 12th Sep 18
Gold Nuggets And Silver Bullets - 12th Sep 18
Bitcoin Trading - SEC Strikes Again - 12th Sep 18

Market Oracle FREE Newsletter

Trading Any Market

6 Tips For Seamless Business Foreign Exchange

Currencies / Forex Trading Feb 22, 2018 - 03:41 AM GMT

By: Submissions

Currencies

For thousands of Australian individuals and businesses across the country, foreign currency exchange is just a fact of life - and also the cause of many a headache.

Perhaps you're just making a payment for a good or a service that's located overseas.  Perhaps you're sending some cash or a gift to another country, or heading there yourself.  Maybe you're buying foreign land, assets, shares or bonds.  Maybe you're in the foreign market game and you make money from the clever appreciation of currencies.  Or perhaps you're an Australian business that makes money from importing or exporting or transacting with overseas entities.


No matter what category you fit into, not losing money is the absolute priority when it comes from turning one fluctuating currency into another.  For a business, one bad foreign exchange could wipe out a profit, and for an individual it could be the difference between a smart move and a plain rip-off.

So how to navigate this complicated world of foreign exchange?  It's a tedious and time-consuming process of browsing banks and searching for the best exchange rates, and if you skip a beat, the costs can spin out of control.

For business, it can be even trickier.  Fluctuating exchange rates and hidden costs can make doing a deal and clearing a profit almost impossible, detracting from day-to-day operations and making it hard to plan ahead, survive and thrive.

So here are some helpful tips for making the process of foreign exchange more seamless:

1. Be prepared

Arm yourself with knowledge - and for foreign exchange, that 'knowledge' is ever-evolving.

Those currency markets move up and down not only constantly but also sharply and suddenly, often as the result of significant political or economic news.  If you're not sure exactly what the situation is with regards to those markets at the moment of your exchange, stop and take some extra time to make sure you know what you're doing.

2. Understand the 'inter bank' rate

To many people, the exchange rate is just the exchange rate.  But it's really not.

Let's say you're using a bank - say, the Commonwealth Bank - to exchange some money to or from Australia.  The rate that actual bank pays when you order the exchange is called the 'inter bank' rate, so look up what it is when you do your exchange and compare it to what your bank is actually telling you the exchange rate is for you (https://australiancurrencyservices.com.au/au/foreign-exchange/).

3. Shop around

Currency exchange entities including banks, brokers and specialist services are not all made alike, as their rates as well as their fees can differ significantly.

So take the exchange provider you've used before, look into the rates and the fees and then start comparing it with the options.  You can get a wide range of services at a bank like Commonwealth Bank, for example, but CBA exchange rates are often bettered by a foreign currency specialist.  However, if you like who you're using and don't like the idea of change, get in touch and don't be shy to try to negotiate something better.

4. Explore the costs

All too often, foreign exchange services will make a great deal of noise about their awesome rates and stay very quiet about the extra costs. 

So never forget that a less attractive exchange rate allied with a low fee can actually be a significantly better option than an apparently brilliant rate with a suitcase of hidden nasties.  A great way to test this is by looking into exactly what it will cost to do your exchange transaction, and then immediately (hypothetically) change that money back into the original currency.  You might be shocked to discover the size of the bite out of your hard-earned cash.

5. Explore the alternatives

You need to get that money from one country to the other, and exchanging currency in the traditional way can seem like the only option.

But thinking outside the box can save you an awful lot, because what some services offer is not just laughable, it's an offensive rip-off.. 

Peer-to-peer transfer services are becoming ever more popular, but for those doing regular business in a particular country for instance, opening an international bank account may also be something worth looking into.

6. Consolidate

Better organising yourself is an often underestimated way to significantly reduce the costs of exchanging money.

Remember that whoever you're using to help you do your currency exchange is a business, so they're factoring in a margin and paying for staff and overheads.  So the more transactions you can cram into a single transaction, the lower those costs will be.  Some currency exchange providers may even give you a really great deal if you can get the amount of a consolidated transaction over a certain threshold.

7. Communicate

If you're a business and the nature of your game means you're doing a lot of overseas dealing, you may have someone you always turn to for those exchanges.

If that's the case, look into the relationship you have with them and see how it can be improved.  Do they know you and your business inside out?  Are you giving them access to enough information with plenty of time to spare to assess the best options as you go?  Industry professionals have a lot of experience and expertise so you'd be silly to not be fully capitalising on it.

Never forget: with a little bit of knowledge, planning and savvy, ending your headache and capitalising rather than suffering when doing your foreign currency exchanges is more than possible.

By Dominic Raines

© 2018 Copyright Dominic Raines - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules