7 Excellent Tips to Make the Most of Currency Exchange
If you ask which is the most liquid market on the earth, the answer is the currency market because major currencies like EUR/USD currency trade on the foreign exchange constantly. Apart from being the most liquid market, currency exchange is also a far less understood market than share market. Therefore if you are planning to participate in this market, you need some very essential tips. Here they are.
1. Exchange Rate is the Most Important
Exchange rates of currencies reported every night on the news are inter-bank or wholesale rates. Suppliers of currencies earn their profit by adding the margin to this wholesale rate and this margin can significantly vary from supplier to supplier. Some suppliers will provide you less exchange rate for your money and will charge more when you would buy it. Therefore, ignoring exchange rate may be a huge risk.
2. Don’t Underestimate Non-bank Providers
Banks can usually be costlier than online foreign exchange providers. But they also offer a convenience of using your existing online banking account instead of all the way opening a new account. For occasional transactions, this convenience may prevail over the cost difference. However, if you make frequent and high volume transactions, you are more likely to benefit by using other specialist providers.
3. Save Yourself from Currency Volatility
A smart currency trader should remember to learn how to lock in exchange rates through forward contracts. It will save you from negative rate movements. Of course, it has a drawback that it reverses a benefit from positive rate movements, if there are any.
4. Budget Rate
Budget Rate refers to the amount you want the exchange rate to reach. When you buy a certain currency when the exchange rate reaches your budget amount, you make the fluctuating exchange rate to work in your favor. The budget rate works for both your minimum as well as maximum desired currency exchange rate and limits losses when you are required to make payments in a situation of the exchange rate being against you.
5. Stay Away from Instant Money Transfers
Transferring money abroad at short notices can be costly. Usually transfers take 1 to 4 days and there are discounts available on bulk orders. Therefore it is smart to combine small payments and you can save on exchange rates and transfer fees. As a general rule, the more remote the destination, the more time it may take.
6. Check Your Options
Checking available options is always advisable for currency exchange and money transfers, as it is with any other financial product. Most companies and banks working in currency exchange are eager to stand out from their competitors and therefore may offer incentives like no fees or tiered rates.
7. Don’t Hesitate to Negotiate
Your money is not saved automatically. You will have to negotiate and ask if there are better deals, especially if you have to do bigger, more frequent transfers. While the fluctuating movements in the market or exchange rates are not in your control, you can choose things to make situation in your favor. Just negotiate and you would be surprised to see the results.
Currency.Wiki offers you financial conversion to stay up-to-date on the most sought pair of currencies – EUR (Euro) and USD (US Dollar). The conversion of these currencies keeps changing in real time because of the daily fluctuation in the world market. With the financial converter of Currency.Wiki, you can stay current with their rates. This is also the best website to check exchange rates of any other currency in the world.